Competition Bureau Appeals Decision in Superior Propane Case

OTTAWA, September 6, 2000 — The Competition Bureau announced today that it has filed a notice of appeal with the Federal Court regarding the Competition Tribunal's recent decision to allow the Superior Propane/ICG Propane merger to proceed on the basis of efficiencies. The Bureau has requested that its appeal, which focuses on the efficiency defence, be dealt with expeditiously.

On August 30, 2000, the Competition Tribunal rendered its decision regarding the merger of Superior Propane and ICG Propane. The Tribunal found that the merger was likely to prevent competition in Atlantic Canada and lessen competition substantially in many local markets across Canada, as well as for national account customers. It recognized that, as a result of the merger, Superior and ICG would have a combined market share of 70 percent on a national basis and a monopoly in a number of markets. The Tribunal also acknowledged the high level of concentration, high barriers to entry, the lack of effective remaining competition and the absence of foreign competition in the propane industry in Canada. It consequently concluded that an order for divestiture of ICG would be the appropriate remedy.

Nevertheless, the majority of the Tribunal concluded that the two companies should be allowed to merge because it was satisfied that the efficiencies presented by Superior would be greater than, and would offset the effects of, any prevention or lessening of competition. However, in a strongly worded dissent, one of the three panel members concluded that Superior had not established an efficiencies defence and that the Tribunal should make the order for total divestiture.

"We believe that the purpose of the Competition Law is to encourage competition in Canada," said Konrad von Finckenstein, Commissioner of Competition. "The impact of this decision is too important for competition for us not to appeal. If this decision is allowed to stand, it will be next to impossible to prevent the formation of monopolies in industries dominated by two firms."

Also on August 30, Superior filed a motion with the Competition Tribunal to end the Hold Separate Consent Order of December 1998, which keeps the two firms operating separately. The Bureau intends to oppose this motion and will seek to have the Hold Separate Order continue throughout the appeal period. The Tribunal will hear the motion on the Hold Separate issue on September 8, 2000.

The Competition Bureau is an independent law enforcement agency that is responsible for merger review and the lawful conduct of business in Canada, as defined by the Competition Act.

For more information, please contact:

Julie Hébert
819-953-4257