Olymel/Westco poultry plant clears regulator

New Brunswick poultry firm Groupe Westco and Quebec’s Olymel have cleared a regulatory hurdle on their way to build a new $30 million poultry slaughter plant in northwestern New Brunswick.

The two companies said in a release Tuesday that they will report on the project’s progress “in the next few weeks,” but for now say that a decision Monday by the federal Competition Tribunal will allow the project, in the St-Francois region near Edmundston, to proceed.

Olymel and Westco agreed in 2008 to partner on poultry meat production, handling their slaughtering, cutting, deboning and distribution operations for the entire Maritimes from a base in New Brunswick.

The two companies’ plan, however, was sidelined by an application to the Competition Tribunal in May 2008 from New Brunswick’s Nadeau Poultry Farm, a subsidiary of poultry processor Maple Lodge.

Nadeau sought an order from the tribunal that would have forced Westco into a supply agreement to deliver live chickens to Nadeau’s processing plant at St-Francois-de-Madawaska, N.B.

But after issuing an interim order last June granting Nadeau a status-quo supply from Westco and two other poultry producers, Dynaco and Acadia Poultry, the tribunal on Monday dismissed Nadeau’s application. The tribunal is expected publish a public version of its specific reasons for the dismissal sometime next month.

“Several months ago, we decided to invest more than $30 million to build a slaughterhouse in the region because we feel it is necessary to add slaughtering to our breeding operations if we want to continue to compete effectively and be able to offer our Canadian customers the best product at the best price,” Westco CEO Thomas Soucy said in the companies’ release Tuesday.

“The tribunal’s decision will allow us to go ahead with this important project. With our new slaughterhouse, we will create approximately 250 new jobs in the north of New Brunswick, and the entire region will benefit from this investment.”

“We always believed in a project which was designed from the outset to strengthen the poultry network in New Brunswick and the Maritimes, and which will benefit mainly the producers, the industry workers and lastly, the consumers,” Olymel CEO Rejean Nadeau said in the companies’ release Tuesday.

“The delays we have encountered have affected our determination to make a success of what represents a mutually advantageous business project and a large-scale investment to serve better our markets.”

Olymel and Westco said the tribunal’s decision follows another decision by the New Brunswick Farm Products Commission, which had also rejected what the two companies described as Nadeau’s request “to secure exclusive rights to all chickens raised in New Brunswick.”

Olymel and Westco read the decisions of both the tribunal and the provincial commission to mean that even if Westco no longer supplies Nadeau with live chickens, it would still be able to keep its slaughter plant operating by sourcing chickens from breeders in other provinces, particularly Nova Scotia and Quebec.

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