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Fighting over chicken processing in New Brunswick

  • June
  • 17

11:54 pm food processing

The battle is brewing over chicken processing in New Brunswick.

The Players

In one corner is the long established Nadeau Maple Lodge (owned by Ontario based parent company Maple Lodge Farms) who currently operates New Brunswick’s only chicken processing facility in the northern New Brunswick community of St. Francois de Madawaska.

In the other corner is Groupe Westco who is a major poultry production group and holds a large amount of the chicken production quota (around 50%) for the province. Joining Groupe Westco in this corner is Olymel, Canada’s largest poultry and pork processor based in Quebec.

Round 1 : Attempted Buyout

Groupe Westco in an effort to assert control over the chicken vertical from egg to plate, made an offer to purchase Nadeau’s chicken processing facility. Nadeau countered that the offer made by Groupe Westco was more of a threat in order to acquire its facilities at reduced price. The claim being that Westco threatened to stop sending any of its chickens to Nadeau if it did not agree to the buyout. Nadeau refused to sell its processing assets to Westco.

Round 2 : Threats

After being rebuffed by Nadeau Poultry, Groupe Westco formed a partnership with Quebec’s Olymel. The goal of the partnership is to build a slaughterhouse in St. Francois in order to process Groupe Westco’s chickens. Until the facility is completed, Westco plans to ship its quota of chickens to an Olymel processing plant in Quebec beginning in July.

Many people including Nadeau claim that Groupe Westco’s actions are anti-competitive and Nadeau Maple Lodge has even filed a complaint with Canada’s competition tribunal. More importantly, many worry about whether the plans for a new processing facility is simply a negotiating tactic on Westco’s behalf in order to acquire the Nadeau slaughterhouse. The other concern is that by shipping chickens to Quebec for processing, processing jobs at the Nadeau plant would be lost to Quebec.

Round 3: Government gets involved

At the beginning of June, the government of New Brunswick amended some legislation in order to allow the government to enforce, if needed, a temporary halt of out of province chicken shipments. This amendment is intended to promote some stability in the sector. Westco is claiming that the government is interfering with the free market and favouring one producer over another.

I think that the provincial gov’t fears that if poultry is taken out of province for processing, not only does it take processing jobs out of the province but that it may put Nadeau Maple Lodge out of business which could cause even more damage to an already fragile northern New Brunswick economy.

It will be interesting to see which way the feathers fly….

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