Ag groups oppose Viterra Bunge merger, Scott Moe ‘watching very closely’

As Bunge moves toward a merger with Viterra, one of Saskatchewan’s biggest companies, agricultural groups are warning that the deal could hurt producers.

Bunge is looking to acquire Viterra, which is involved in grain purchasing, processing and marketing. But a group of agricultural associations have come out against the merger.

The Agricultural Producers Association of Saskatchewan, Alberta Grains, SaskBarley and Sask Wheat all say the deal could mean economic losses for producers.

The claim was supported a recent study from the University of Saskatchewan, which found the merger would harm producers, finding “worrisome” levels of market concentration on grain export services at the port of Vancouver, B.C., the canola crushing sector, and competition at primary elevators.

“The results of both of these studies validate concerns producers have been raising about the impact of the proposed merger on competition in the grain handling industry and ultimately returns to farmers” said Jake Leguee, chair of Sask Wheat, in a news release.

Together, the four groups are calling on the federal government to consider the deal’s potential impacts “on the profitability and sustainability of farmers.”

Premier, government keeping a close eye on deal

Meanwhile, the provincial government is keeping an eye on the merger.

Asked if he had any concerns about the merger, Premier Scott Moe said it wasn’t so much a matter of concerns, but the deal is still something the government will be “watching very closely.”

Viterra’s head office is currently in Regina, and Moe said his government wants to know what will happen to those jobs after the deal.

“We understand that Bunge is an internationally operating company, and we’re not asking them to move their head office here, but we certainly don’t want to lose access for our primary producers (and) we don’t want to lose the jobs that are currently Viterra jobs here in Regina,” said Moe.

The premier said he’s also keeping an eye on the canola crush plant Viterra plans to build just outside Regina. Moe said his government has worked very hard to create a good investment environment in the province.

“That very much is on our radar as part of the conversation as well, as these merger talks transpire and find their way through the process,” said Moe.

The Canada Competition Bureau recently put out a report saying the merger would likely reduce competition in markets for grain purchasing in Western Canada and the sale of canola oil in Eastern Canada.

“(It’s) likely to result in substantial anti-competitive effects and a significant loss of rivalry,” read the report.

Transport Canada is set to complete a public interest assessment this summer.

Moe said his government will be watching what the companies’ response is to the Competition Bureau report.

“What we will be watching for is, number one, is this in the best interest of our primary agriculture producing community? Two, is it in the best interest of many of our rural Saskatchewan communities? And three, is it in the best interest of agriculture in general and expanding our footprint around the world?” he explained.

Moe said both he and Agriculture Minister David Marit have been in touch with both parties.