WINNIPEG (B)--Two Canadian grain companies are inhibiting competition by refusing to take part in the Canadian wheat Board's tendering process, a spokesman with the CWB told BridgeNews Sept. 20. The CWB asked the Canadian Grain Commission to enforce the Canada Grain Act, after Saskatchewan wheat Pool and James Richardson International, two of Canada's largest grain companies, threatened to refuse to unload railcars coming from Northwest Terminal at Unity, Saskatchewan.
"The larger companies are...either trying to punish the smaller company for taking part in the tendering process and therefore inhibiting competition, or they're just trying to inhibit competition period, by trying to show other people not to take part in it," said Justin Kohlman, spokesman with the Canadian wheat Board.
Northwest Terminal won a tender with the CWB, Canada's sole exporter of wheat and barley, and as part of the tender agreement, Northwest asked the CWB to handle the transportation logistics, such as which port terminal would be used, Kohlman said.
"It is one thing for the companies not to participate in the tendering process. It is quite another for them to illegally try to punish those independent companies that do take advantage of the tendering process," Adrian Measner, vice president of marketing for the CWB, said in a prepared statement.
Northwest Terminal does not own a port terminal, and therefore has to move grain through one of the major grain company's elevators. Kohlman said that SWP and JRI, both of which own port terminals, told the CWB that they would not handle the grain.
"They even went so far as to tell the railways not to deliver the cars because they wouldn't be unloaded," he said.
Kohlman said Canadian National Railway agreed to move the cars, and the wheat Board has contacted the CGC, asking it to use its authority in order to force the grain companies to live up to their obligations and move the grain.
Canada's Grain Act states that terminals must unload the cars if there is space. Failing to do so can result in the terminal being fined or having its license removed.
"It appears they have no interest in trying to make the system work even if it means better movement for their farmers," Kohlman said.
The grain is expected to arrive at the port terminals in about another week, Kohlman said.
"Our hope is that by the time the grain gets there, the companies will unload it and we won't have a problem, or if they don't, that the Grain Commission will use the authority that they have to make sure it unloads," he said.
The federal government announced transportation legislation in June that stated 25% of the CWB's grain movement must be through tendering.