Beef Merger Can Proceed Following Bureau Scrutiny

OTTAWA, August 30, 2005 — The Competition Bureau has concluded that Cargill Limited’s acquisition of the Better Beef Group of Companies is not likely to result in a substantial prevention or lessening of competition.

Over the course of a comprehensive four-month review, the Bureau examined the merger’s impact on the Canadian cattle and beef industry, consulting industry associations, farmers, competitors, customers, and independent economic experts.

Its review found that:

• there is limited direct competitive overlap between Cargill and Better Beef in the purchase of cattle;
• the recent reopening of the United States border to the export of live Canadian cattle under 30 months of age appears to provide a viable and competitive outlet for cattle producers;
• even if the border were to close, the effects would not be significant enough to result in a substantial lessening or prevention of competition because of the geographic distance between Cargill’s existing processing facility in High River, Alberta, and Better Beef’s facility in Guelph, Ontario; and
• retailers will still have access to sufficient sources of supply for boxed beef, and are likely to possess sufficient countervailing power to offset an exercise of market power by the merged entity in the supply of case-ready beef.

The Competition Bureau is an independent law enforcement agency. We contribute to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

Technical Backgrounder

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