Competition Tribunal Favours Groupe Westco
In a decision handed down June 9, the Competition
Tribunal rejected the request by Nadeau Ferme Avicole
Limitée to force Groupe Westco Inc. to deliver all
the live chickens it raises to Nadeau.
June 9, 2009 – In a decision handed down on June 9, the Competition Tribunal (the "Tribunal") rejected the request by Nadeau Ferme Avicole Limitée ("Nadeau") to force Groupe Westco Inc. ("Westco") to deliver all the live chickens it raises to Nadeau, in spite of the absence of any contractual agreement between the parties. The motives for the Tribunal's decision are confidential for the time being and the Court plans to issue a public version early in July, after consultation with parties.
This decision means that Westco and its partner Olymel can go ahead with their plan to build a new slaughterhouse in the Saint François region in New Brunswick. In March, 2008, Olymel and Westco had announced the conclusion of a business partnership and agreed to pool their expertise in order to develop their poultry meat production, slaughtering, cutting, deboning and distribution operations for the entire Maritimes from a base in New Brunswick. Westco and Olymel l.p. will report publicly on progress with the new slaughterhouse project in the next few weeks.
According to Olymel l.p. President and Chief Executive Officer Réjean Nadeau, both partners placed a lot of hope in this partnership combining the benefits of a producer and an operator-processor, both with extensive, complementary expertise. "We always believed in a project which was designed from the outset to strengthen the poultry network in New Brunswick and the
Maritimes, and which will benefit mainly the producers, the industry workers and lastly, the consumers. The delays we have encountered have affected our determination to make a success of what represents a mutually advantageous business project and a large-scale investment to serve better our markets," Réjean Nadeau noted.
"Several months ago, we decided to invest more than $30 million to build a slaughterhouse in the region because we feel it is necessary to add slaughtering to our breeding operations if we want to continue to compete effectively and be able to offer our Canadian customers the best product at the best price. The Tribunal's decision will allow us to go ahead with this important project. With our new slaughterhouse, we will create approximately 250 new jobs in the North of New Brunswick, and the entire region will benefit from this investment," added Westco President and Chief Executive Officer Thomas Soucy.
The decision by the Competition Tribunal follows another decision handed down by the New Brunswick Farm Products Commission (the "Commission"), which had rejected the requests made by Nadeau to secure exclusive rights to all chickens raised in New Brunswick. Both the Commission and the Tribunal concluded that, even if Westco no longer supplied Nadeau with live chickens, it would still be able to obtain the chickens it needed to keep its slaughterhouse operating from breeders located in other provinces (in particular Nova Scotia and Quebec).
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