USask study highlights more concerns with proposed Bunge-Viterra merger
Several western Canadian organizations representing producers have joined the fray in expressing their concerns over the proposed merger of Regina-based Viterra with the Swiss-founded company Bunge.
Sask. Wheat, Sask. Barley and Alberta Grains released a joint statement Monday saying the merger between the two global agricultural giants could give one company too much control of the market, passing higher costs down to smaller producers.
The trio of organizations highlighted a study conducted by University of Saskatchewan researchers Dr. Richard Gray, Dr. James Nolan and Dr. Peter Slade.
The study examined the impact of the merger at the Port of Vancouver, the canola crushing sector and competition at primary elevators and “found worrisome levels of market concentration in all three scenarios.”
According to the study, 40 per cent of the export capacity at the Port of Vancouver would be controlled by one firm.
“In this market, the proposed merger will generate an estimated $570 million in annual costs to Canadian grain producers, who will bear the brunt of the increased monopsony power,” the study read.
The concentration of market shares in the canola crushing sector would see margins increase by 10 per cent.
“The increase in export basis and canola crush margins would reduce producer income by approximately $770 million per year,” the study outlined.
Additionally, the study identified that the merger may also reduce incentives for Viterra to build its proposed canola crushing facility in Regina from $143 million per year to $78 million.
The analysis of primary elevator competition revealed concerns over market power in many areas in Western Canada, which will only get worse if the industry continues to consolidate.
“We find the [Bunge-Viterra] merger will have significant negative consequences for the Western Canadian grain export sector,” the study continued.
The study follows the release of a report by the Canadian Competition Bureau, which identified substantial anti-competitive effects and a significant loss of rivalry in select markets across the country related to the deal.
Bunge’s 25 per cent ownership stake in Viterra competitor G3 was highlighted.
The bureau identified Nipawin, Sask. and Altona, Man. as two areas of concern, where the combined market share of the two companies exceeds 45 per cent and 60 per cent.
The bureau also forecasted anti-competitive effects for the sale of canola oil in eastern Canada to customers who cannot receive oil by rail.
The Agricultural Producers Association of Saskatchewan (APAS) released its own statement following the Competition Bureau report — believing the merger would lead to more one-sided, take-it-or-leave-it grain contracts, fewer delivery options and lower prices as grain companies are able to hold more of the cards with less competition.
Bunge and Viterra have dismissed producer and industry concerns over the proposed merger, calling them “misplaced.”
Bunge Ltd. is a global agribusiness and food company headquartered in St. Louis, Missouri. Originally incorporated in Switzerland, the company boasts 23,000 employees across 300 facilities in 40 countries.
Viterra is an international agribusiness that was formed in 2007 when the Saskatchewan Wheat Pool merged with Agricore United. Headquartered in Regina, the company of 16,000 workers handles and markets grain, along with other agricultural products across 37 countries.
CTVNews.ca Top Stories
NEW Pack the macaroni necklace: Lessons on evacuations from a woman who fled one of Canada's worst wildfires
Carol Christian had 15 minutes to evacuate her home during the Fort McMurray wildfires in 2016. She ended up losing the house and everything inside. Now, she wants to share the lessons she learned.
Scheffler detained by police at PGA Championship for not following orders after traffic fatality
Masters champion Scottie Scheffler was detained by police Friday morning on his way to the PGA Championship, with stunning images showing him handcuffed as he was led to a police car. ESPN reported he failed to follow police orders during a pedestrian fatality investigation.
Ontario sees first measles death in more than a decade after young child dies
A young child has died of measles in Ontario, marking the first death in the province from the highly contagious virus in more than 10 years, a Public Health Ontario report confirms.
Think twice before sharing 'heartbreaking' social media posts, RCMP warn
Mounties in B.C. are urging people to think twice before sharing "heartbreaking posts" on social media.
'Ugly produce': One way Canadians are shrinking rising grocery bills
As the cost of food in Canada has risen, grocery shoppers are looking at ways to reduce their grocery bill, and more are choosing price over beauty, turning to companies that deliver so-called 'misfit' produce at a fraction of the cost.
Vatican revamps norms to evaluate visions of Mary as it adapts to Internet age and combats hoaxers
The Vatican on Friday radically reformed its process for evaluating alleged visions of the Virgin Mary, weeping statues and other seemingly supernatural phenomena, insisting on having the final say in whether the events are worthy of popular devotion.
Wildfires are dampening against cool, rainy weather, but there's plenty left to contain
An opportune system of cool, wet weather Friday is dampening the spread of wildfires across Western Canada, but there's still plenty of work for responders and residents alike.
Jessica Biel hopes to normalize the conversation around menstruation with a new children's book
Jessica Biel is the author of a new children’s book focused on destigmatizing and normalizing the conversation around menstruation.
5 secrets to moving better and preventing avoidable injury
Countless people seek emergency care for back pain, muscle strains and similar injuries resulting from “moving wrong” during mundane, everyday tasks such as bending over to tie shoes, lifting objects or doing household chores.