A new joint venture formed to run seven existing crop input retail centres in central and southeastern Saskatchewan will settle for six.
The federal Competition Bureau on Wednesday announced an agreement with Federated Co-operatives (FCL) and the ag retail arm of the Saskatchewan-based Blair’s Family of Companies toward approval of their proposed joint venture.
Blair’s and FCL in February had announced the joint venture to own and operate the seven Blair’s ag retail outlets at Lanigan, Nokomis, Watrous, Liberty, McLean, Lipton and Rosthern.
The joint venture will now start operating effective July 31, the companies said Wednesday.
The bureau said Wednesday its agreement with FCL and Blair’s will “preserve competition for the sale of crop inputs in the area of Lipton,” about 90 km west of Melville.
If it were approved with no conditions, the proposed venture would “likely substantially lessen competition” in retail crop inputs such as fertilizers, ag chemicals and seeds, leading to “higher prices and lower service quality for local growers” in the rural municipalities of Cupar, Kellross, Lipton and North Qu’Appelle, the bureau said.
Melville-based Prairie Co-op, a member of the FCL group of co-operatives, also operates ag retail centres in the area, including one at Lipton and others at nearby communities including Ituna, Cupar and Kelliher, as well as at Melville and Strasbourg.
Other ag retailers in the Lipton area are not “vigorous competitors” to Prairie Co-op or Blair’s, lack the “infrastructure and ability to effectively serve anhydrous ammonia customers,” and aren’t likely to expand services in reaction to the FCL/Blair’s venture, the bureau said.
Thus, FCL and Blair’s must sell the Blair’s site at Lipton, along with Blair’s anhydrous satellite sites at Lipton and nearby Balcarres, once they find a buyer acceptable to the federal Commissioner of Competition.
Until then, the Lipton site will operate under “an expanded preservation order, including an information firewall, in order to protect and preserve the divestiture assets.”
In its ruling, the bureau said the joint venture was otherwise “unlikely to result in a substantial lessening of competition” at the six remaining Blair’s sites. It sees “effective remaining competition in those areas” and/or a “low degree of competitive rivalry” between Blair’s and nearby Co-op stores.
The sites operating under the new joint venture “will offer a broad range of crop input and animal nutrition products and services to continue to meet the business needs of local area farmers and ranchers,” FCL and Blair’s said in February.
The six sites will continue to operate under the Blair’s banner and Blair’s staff will “continue to manage the day-to-day operations.”
The retail businesses going to the new venture include Blair’s AgIntelligence ag consulting services, its proprietary PerforMax line of beef cattle nutrition products, and other feed products for the poultry, hog, sheep, horse and dairy sectors and companion animals.
Other Blair’s-owned businesses — such as its Texcana Logistics fertilizer terminal near Hanley, Sask., and its farming operations, including Blair’s Ag Cattle Co. — are not part of the joint venture. — Glacier FarmMedia Network