September 8, 2009

New Brunswick poultry producers Groupe Westco and Quebec meat packer Olymel say they're willing to take their plans for a new joint-venture poultry plant into mediation with another New Brunswick packer.

The two partners announced plans for a US$30 million poultry slaughter and processing plant at Clair, southwest of Edmundston in northern New Brunswick.

Westco and Olymel aim to gradually transfer Westco's poultry production to Olymel slaughterhouses in Quebec. Once the Clair slaughterhouse is built, Westco's production is again to be slaughtered in New Brunswick.

Westco has previously said it has no alternative but to build a new slaughterhouse in northern New Brunswick if it wishes to complete its egg-to-plate integration system.

However, Ontario meat company Maple Lodge, which owns a rival slaughter plant at St. Francois de Madawaska, New Brunswick through its Nadeau Poultry Farm wing, recently sought a federal Competition Tribunal order to secure its supply of New Brunswick poultry from Westco.

Nadeau, the two companies said, wanted an order compelling Westco to accept a supply agreement to deliver live chickens to Nadeau's processing plant.

The tribunal in June 2009 dismissed that application and also the New Brunswick Court of Appeal also ruled that Westco and other producers are not obliged to allocate a part of their production to Maple Lodge.

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.