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News 506 views update:Sep 8, 2009

Canada: Mediation needed for poultry packers

New Brunswick poultry producers Groupe Westco and Quebec meat packer Olymel say they're willing to take their plans for a new joint-venture poultry plant into mediation with another New Brunswick packer.

The two partners announced plans for a $30 million poultry slaughter and processing plant at Clair, southwest of Edmundston in northern New Brunswick.

Starting this week Westco and Olymel aim to gradually transfer Westco's poultry production to Olymel slaughterhouses in Quebec. Once the Clair slaughterhouse is built, Westco’s production is to again be slaughtered in New Brunswick.

Westco has previously said it has no alternative but to build a new slaughterhouse in northern New Brunswick if it wishes to complete its egg-to-plate integration system.

Rivalry
However, Ontario meat company Maple Lodge, which owns a rival slaughter plant at St-Francois-de-Madawaska, New Brunswick through its Nadeau Poultry Farm wing, recently sought a federal Competition Tribunal order to secure its supply of New Brunswick poultry from Westco.

Nadeau, the two companies said, wanted an order compelling Westco to accept a supply agreement to deliver live chickens to Nadeau's processing plant.

The tribunal in June 2009 dismissed that application and also the New Brunswick Court of Appeal also ruled that Westco and other producers are not obliged to allocate a part of their production to Maple Lodge.

Olymel and Westco read the decisions of both the tribunal and the provincial commission to mean that even if Westco no longer supplies Nadeau with live chickens, it would still be able to keep its slaughter plant operating by sourcing chickens from breeders in other provinces, particularly Nova Scotia and Quebec.

Mediation required
Now, however, New Brunswick Agriculture Minister Ronald Ouellette is urging mediation.

Since the earlier rulings in its favour, Westco and Olymel have courted Maple Lodge to sell its slaughter plant to them or even join the joint venture.

"Our first choice has always been to process our chickens in New Brunswick, and that is why we have taken all possible measures to preserve jobs in the region while our slaughterhouse is being built by trying to find grounds for agreement with Maple Lodge,” Westco CEO Thomas Soucy said.

Maple Lodge "has categorically rejected all our offers, and unfortunately, the workers are now paying the price," he said.

Natalie Berkhout

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