Canada's competition watchdog has intervened in a proposed $150-million takeover in the grain supply chain, requiring the sale of a Saskatchewan elevator to protect farmers from reduced competition.
Competition Bureau Steps In
Parrish and Heimbecker Ltd., one of Canada's largest agribusinesses, sought to acquire competitor GrainsConnect Canada Operations Inc., gaining ownership of 36 grain elevators across Western Canada. The Competition Bureau reviewed the proposal to determine whether the expanded ownership would be anti-competitive and force farmers to accept lower grain prices.
The bureau found that only one of the grain handling assets—a 35,000-tonne facility in Reford, Saskatchewan—would reduce competition for wheat purchases from farmers. On Friday, it announced a binding agreement with Parrish and Heimbecker to resell that elevator upon regulatory approval.
"The sale will help ensure that farmers in the region continue to benefit from competition when selling wheat and other grains," the independent federal agency stated.
Impact on Farmers
Grain elevators are critical infrastructure that receive and store harvested crops before shipping for processing or export. Farmers typically see a spread in grain prices among terminals in their region. If a company held a monopoly, it could offer lower prices, and farmers would face higher fuel costs to deliver to distant terminals with better rates.
Farmer Dan Holman, whose family farm operates 20,000 acres near Reford, expressed relief that Parrish and Heimbecker would not add a third nearby terminal. "From a farm competition point of view, I'm happy to see a new company come into the area that will hopefully take over," said Holman, general manager of Holman Farming Group.
Parrish and Heimbecker already owns two terminals near Reford. Under the agreement, it must keep the Reford facility operational until a subsequent sale is completed.
Company Response
Parrish and Heimbecker said it continues to "respectfully but vigorously disagree" with the Competition Bureau's findings. However, it agreed to sell the asset as a "pragmatic business decision to avoid prolonged regulatory delay."
The takeover includes four high-capacity inland terminals across Saskatchewan and Alberta from GrainsConnect Canada Operations Inc. The deal highlights ongoing consolidation in Western Canada's grain market, which farmers worry will erode their profits.
