Ruling doesn’t end N.B. supply management problem: Nadeau

Poultry farmers shouldn’t assume the Supreme Court’s dismissal of a case against a New Brunswick chicken producer allows them to sell their birds wherever they want, a jilted processor warns.

New Brunswick processor Nadeau Poultry, which had asked the Supreme Court to look at its claim of "refusal to deal" against poultry producer Groupe Westco, said Friday that the dismissal deals with a completely separate issue from what it views as the larger problem.

"All the court proceedings looked at was a very narrow section of the (federal) Competition Act, namely a section called ‘refusal to deal,’" Nadeau general manager Yves Landry said in a release Friday. "Nothing more was dealt with."

Thursday’s Supreme Court dismissal, the federal Competition Tribunal’s ruling and the New Brunswick Court of Appeal’s decision upholding that ruling "in no way abdicate the New Brunswick government of their legislated obligation to provide orderly marketing of chicken in the province given that it is a regulated commodity in Canada," he said.

The Competition Tribunal’s ruling, Nadeau said, found only that the company "failed to establish certain technical elements that were required to constitute a ‘refusal to deal.’"

The company said its "inability to fulfill those technicalities was directly related to the fact that the chicken industry operates under a supply management system which prevented Nadeau from being able to meet all requirements."

The company said it had hoped that the Supreme Court would hear the case to "resolve the clashes between these two national legislative schemes, namely, the supply management system and the Competition Act."

Groupe Westco has apparently concluded it can go ahead and build a "vertically integrated monopoly in the chicken industry in New Brunswick," Nadeau said, but added that conclusion is "without basis."

"Current stance"

Westco, in a joint venture with Quebec meat packer Olymel, is building "Sunnymel," a $40 million chicken slaughter, cutting and deboning plant at Clair in northwestern New Brunswick, for completion by the end of 2012.

Pending construction of the Clair plant, with a planned capacity of about 450,000 birds per week, Westco in 2009 began shipping its chickens to Olymel plants in Quebec for processing. 

According to Nadeau on Friday, Olymel’s plants are now receiving 80 per cent of Westco’s birds, while Nadeau since 2009 has had two rounds of layoffs at its own nearby chicken plant, citing lack of supply.

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

That order was later invalidated in New Brunswick’s Court of Queen’s Bench and the Liberals were voted out in September that year.

Nadeau, owned by Ontario processor Maple Lodge Farms, has also proposed a New Brunswick Chicken Marketing Agency that would deal "solely" with the marketing of broiler chickens past the farm gate, but the province has rejected that idea.

"Clearly the government’s current stance on this matter is biased towards the interests of a corporate producer (Groupe Westco) at the expense of the province’s processing industry and New Brunswick consumers," Landry said Friday.

"The government must implement a solution that fairly allocates New Brunswick-grown chicken to any and all processors in the province," he said. "This will promote competition in the industry and ensure that New Brunswick-grown chickens are made available to New Brunswick consumers as was intended by the supply management system."

Related stories:

Supreme Court dismissal halts N.B. chicken dispute, Dec. 22, 2011

Nadeau to press for chicken supply rules in N.B., June 14, 2011

N.B. won’t restructure chicken system for Maple Lodge, Feb. 24, 2011

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