Competition Bureau to Challenge Part of UGG Acquisition of Agricore

OTTAWA, November 1^st, 2001 — The Competition Bureau announced today that it will file an application with the federal Competition Tribunal to challenge the United Grain Growers Limited ("UGG") acquisition of port terminal assets held by Agricore Cooperative Ltd. ("Agricore") at the Port of Vancouver. The Bureau will ask the Tribunal to order UGG to divest a port terminal at Vancouver.

"We are taking steps to ensure that farmers and grain handling companies continue to enjoy the benefits of competitive access to the Vancouver port terminal facilities" said Gaston Jorré, Senior Deputy Commissioner of Competition. "Access to the Vancouver port terminals is vital in maintaining a competitive and efficient grain handling industry in Western Canada."

In addition, the merging parties have agreed with the Competition Bureau to divest a comprehensive package of grain elevator assets in Manitoba and Alberta. As a result of the agreement, the parties will offer for sale:

• a minimum of five primary grain elevators in the Edmonton and Peace River regions of Alberta; and
  
  
• a primary grain elevator in the Dauphin region of Manitoba.

As part of the agreement, the merged company will also be required to abide by strict confidentiality provisions with regard to its post-merger ownership interests in CanAmera Foods Ltd., a Canadian canola seed processor. These provisions will prevent the sharing of proprietary information with Archer Daniels Midland Company, a major shareholder in UGG who is also a large domestic oil seed processor and competitor of CanAmera Foods Ltd.

"We are confident that our agreement will protect Western farmers' ability to access competitive grain-handling services and to receive fair value for their grain at the local elevator level," said Gaston Jorré, Senior Deputy Commissioner of Competition.

The Bureau will file an additional application for a Consent Order to the Competition Tribunal asking the Tribunal to approve this agreement.

Following a thorough review the Competition Bureau determined that, among other factors, the merging companies' increased market shares in Vancouver port terminal grain handling services and in certain grain-handling markets in Manitoba and Alberta would have resulted in a substantial lessening of competition.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

For more information, please contact:

Tim Weil
Senior Communications Advisor
Competition Bureau
Tel: 819-953-9271 or 613-296-2189 (cell.)

General Public Enquiries, please contact:

Competition Bureau's Information Center
819-997-4282 or toll-free 1-800-348-5358