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
B.C. serial killer Robert Pickton hospitalized after prison attack
British Columbia serial killer Robert Pickton sustained life-threatening injuries in a Quebec prison Sunday in what officials described as a 'major assault.'
Singapore Airlines flight hits severe turbulence; 1 passenger dead, 7 critically injured
One passenger was killed and 30 injured after a Singapore Airlines SIAL.SI flight from London hit severe turbulence en route on Tuesday, forcing it to make an emergency landing in Bangkok, officials and the airline said.
WATCH Why today's inflation numbers are good if you have a mortgage
New inflation data is 'welcome news' for consumers and an economist says it could signal the possibility for a interest rate cut as several core measures also continue to ease.
Conservatives kick off return to House with new call for Speaker Greg Fergus to resign
Pierre Poilievre's Conservatives returned to the House of Commons on Tuesday with a renewed call for Speaker Greg Fergus to resign, this time over 'very partisan' and 'inflammatory' language used to promote an upcoming event.
opinion Tom Mulcair: With Trudeau spiralling, Mark Carney waits in the wings
In his latest column for CTVNews.ca, former NDP leader Tom Mulcair argues that if there's an unofficial frontrunner in the eventual race to replace Justin Trudeau as Liberal leader, it has to be former Bank of Canada governor Mark Carney.
Trump campaign calls 'The Apprentice' 'blatantly false,' director offers to screen it for him
Donald Trump's reelection campaign called 'The Apprentice,' a film about the former U.S. president in the 1980s, 'pure fiction' and vowed legal action following its premiere at the Cannes Film Festival. But director Ali Abbasi is offering to privately screen the film for Trump.
Feels like mid-30s in parts of Canada, while other areas expecting snow
Anything is possible this week, as far as Canada's weather is concerned, with forecasts ranging from scorching heat in some parts of the country to rain and snow in others.
Nestle to sell $5 pizza, sandwiches in the U.S. for Wegovy, Ozempic users
Nestle NESN.S will market a new, US$5 line of frozen pizzas and protein-enriched pastas in the United States which it says it designed specifically for people taking drugs such as Wegovy or Ozempic for weight loss.
How much more Canadian consumers are paying, compared to this time last year
Canada's annual inflation rate slowed to a three-year low of 2.7 per cent in April, matching expectations, and core measures continued to ease, data showed on Tuesday, likely boosting chances of a June interest rate cut.