Nadeau to press for chicken supply rules in N.B.

Stymied so far in its bids for satisfaction from the courts, New Brunswick processor Nadeau Poultry plans to pile pressure on the province to stabilize the chicken supply management system in its favour.

Nadeau, owned by Brampton, Ont.-based Maple Lodge Farms, said Friday it’s considering seeking leave to appeal to the Supreme Court of Canada, after recently losing a case at the Federal Court of Appeal in a long-simmering dispute over whether a major New Brunswick chicken producer is obliged to supply poultry packers within New Brunswick.

The federal court on June 2 upheld a 2009 decision by the federal Competition Tribunal, which ruled a decision by New Brunswick producer Groupe Westco to stop supplying Nadeau was not an illegal “refusal to deal” as per federal competition law.

The issue dates back to 2008 when Westco announced plans for “Sunnymel,” a chicken slaughter, cutting and deboning plant it would build at Clair, N.B. in a joint venture with Quebec meat packer Olymel.

Sunnymel, when open, is expected to serve the “entire Maritimes market from New Brunswick” with slaughter space to handle up to 450,000 birds per week.

Westco in 2009 began shipping its chickens to Olymel processing plants in Quebec, pending Sunnymel’s construction at Clair. Nadeau then announced layoffs at its plant at nearby St-Francois-de-Madawaska.

“By no means”

Nadeau said in a release Friday it will make its case “through a heightened appeal to the provincial government and now the public.”

“Our battle to protect a safe and secure chicken food supply in New Brunswick — and secure local jobs based on 50 years of history in the St. Francois community — is by no means over,” Nadeau general manager Yves Landry said in the release.

The New Brunswick government, Nadeau said Friday, “has consistently maintained that they lack the legislative power” to regulate poultry supply within the province, “even though each and every other province in Canada has, in similar circumstances, upheld their supply management regulatory function in the interests of farmers, processors and ultimately, consumers.”

Landry on Friday accused the province of allowing Westco “to gain a monopoly over almost 80 per cent of New Brunswick chickens despite regulations limiting control to approximately 10 per cent of the provincial quota for any one producer.”

The province, he said, also “failed to intervene when Groupe Westco started diverting these chickens to Quebec for processing, causing the loss of 165 jobs at Nadeau and economic devastation in St. Francois.”

Furthermore he said, the province has “refused to implement any of the solutions used in other provinces to ensure supply management stability.”

When supply management is functioning as intended, he said, a producer would never be able to put a processor out of business. “Fair allocation is an essential part of the system and is observed in supply-managed sectors in every other province,” Nadeau said.

“The recent Court of Appeal decision clearly puts the ball back in the provincial government’s court,” Landry said in the release. “And that’s where it should be given that regulating supply management is a provincial responsibility.”

“Three-legged stool”

Nadeau in 2008 filed a complaint with Chicken Farmers of New Brunswick calling for a “guaranteed supply system,” but was rejected.

The previous Liberal government in New Brunswick responded to Nadeau’s layoffs in January 2010 with a ministerial order designating Nadeau as the only federally-inspected plant for processing of chickens raised within the province.

That order, however, was later invalidated in court and the Liberals were voted out in September.

Nadeau in February also proposed a New Brunswick Chicken Marketing Agency that would deal “solely” with the marketing of broiler chickens past the farm gate and would allocate live chicken supply to processors both within and outside New Brunswick, but the province has rejected that idea.

Nadeau recently enlisted Lyle Vanclief, a former eastern Ontario farmer and federal agriculture minister in Jean Chretien’s government, to help plead its case.

In a functioning supply-managed system, the interests of all players must be balanced and protected, Vanclief said. “That’s because supply management is like a three-legged stool: producers, processors and consumers all have to be treated fairly. When one leg is broken, there is no stability.”

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