Alberta Pine Shake Manufacturer Convicted of Bid-rigging under the Competition Act

OTTAWA, April 25, 2000 - The Competition Bureau announced today that a Calgary based manufacturer and retailer of pine shakes has pleaded guilty and has been convicted of bid- rigging, an offence under section 47 (2) of the Competition Act.

Shakemaster Manufacturing Inc., a predecessor of Shakemaster Incorporated, pleaded guilty to rigging bids for the purchase of commercial timber permits at an auction held by the Alberta Land and Forest Service in November, 1996. The Alberta Court of Queen's Bench ordered Shakemaster Manufacturing Inc. to pay a fine of $15,000. In addition, the Court imposed a Prohibition Order prohibiting Shakemaster Manufacturing Inc. as well as its successors and their agents and employees, from agreeing not to bid, or not to compete, on purchases of timber from the Alberta Land and Forest Service. The Order also prohibits the parties from agreeing to submit or not submit bids without first advising the bidding authority.

A charge of bid-rigging and a charge of attempting to impede an inquiry, contrary to section 64 of the Competition Act, against the President of the company, Mr. Lindemulder, were withdrawn pursuant to a plea agreement.

"This conviction should alert individuals and corporations, be they large or small, that competition law offences will not be tolerated" said Mr. Konrad von Finckenstein, Commissioner of Competition. "This case demonstrates how enforcement of the Competition Act assists in maintaining and encouraging free and fair market practices in Canada."

Evidence showed that, prior to the auction in question, Mr. Lindemulder met and formed an agreement with other pre-qualified participants in an auction category closed to local manufacturers. Some of these participants agreed to bid only on designated permits, and not to bid in competition against one another. This allowed bidders to acquire permits for the minimum bid price of 10 cents per cubic meter. By comparison, competitive bids for the 11 similar permits sold in the ?open' category at the same auction ranged between $11.13 and $25.53 per cubic meter, with a weighted averaged bid of $20.55 per cubic meter of wood.

In February, 1998, four other Alberta wood products manufacturers pleaded guilty to charges of bid-rigging for their participation in the same offence. The testimony of two individuals who had previously pleaded guilty, paid fines, and performed community service, played an instrumental role in the conviction of Shakemaster.

Court Documents
Admission of Facts - (PDF: 194 KB)
Prohibition Order - (PDF: 148 KB)

For more information, please contact:

Cynthia Grant
(819) 994-0349