Anti-Competitive Conduct Fails To Meet Threshold In FBN Inquiry
On March 15, the Commissioner of Competition announced the Canadian Competition Bureau completed its two-plus-years investigation into anti-competitive conduct in the crop inputs business in western Canada.
In its announcement, the bureau said: “The evidence gathered and analyzed by the Bureau does not establish that competitors had an agreement or arrangement in relation to FBN; however, the investigation uncovered communications by certain market participants with the goal of influencing suppliers of crop inputs with respect to FBN. Firms should be aware that these types of communications can result in an agreement or arrangement, which may contravene section 90.1 of the Act, or, depending on the terms, the criminal conspiracy provision of the Act (section 45).”
Additionally it said, “The evidence gathered and analyzed by the Bureau also failed to meet the threshold to establish that dominant Targets acted with anti-competitive intent toward FBN and that competition was substantially lessened or prevented in the markets for crop inputs in western Canada.”
You can read the full release here.
The formal inquiry started in October 2019. In the two years before, FBN was working to grow its business in Canada, and then in 2018 it acquired Yorkton Distributors Ltd, an independent brick-and-mortar retailer in Saskatchewan. FBN raised concerns certain wholesalers and manufacturers of crop inputs were denying or restricting supply and/or associated rebate programs to FBN. It was also alleged certain wholesalers and manufacturers of crop inputs were communicating with other businesses in the industry about FBN.
“Having carefully reviewed the evidence gathered, the Bureau has ended its investigation and does not intend to take further investigative steps at this time,” wrapped up the bureau's statement on this specific inquiry.
FBN provided The Scoop this statement from its co-founder Charles Baron: ""We appreciate the work of the Bureau and its findings. I can’t comment on the Bureau’s decision, but what I can tell you is that Canadian farmers - all farmers - benefit from transparent pricing and increased competition. That’s what FBN continues to bring to the market: greater transparency and more choice for farmers. While the Bureau concluded that the evidence did not sufficiently demonstrate that an agreement existed between competitors in relation to FBN, the regulator stated that it viewed these communications to be of significant concern. Further, the Bureau warned that firms should be aware that similar communications could create agreements that contravene the civil or criminal conspiracy provisions of the Competition Act depending on their terms."
FBN also distributed a news release after the bureau’s conclusion was released.
In Canada, the agriculture industry accounts for 7.4% of the country’s GDP.
The bureau’s report concluded with, “The agricultural industry is of great importance for the Canadian economy. If you are aware of or subject to anti-competitive conduct in the agricultural industry, do not hesitate to bring these concerns to the Bureau’s attention.”
