Marine Harvest’s buy-up of integrated salmon-farmer, Northern Harvest, will have to be reviewed by the Canadian Competition Bureau, in a process that could take as long as a year, judging by the results of a SalmonBusiness query.
“The Bureau must be given advance notice of proposed transactions when the target’s assets in Canada or revenues from sales in or from Canada generated from those assets exceed $88 million,” the Competition Commissioner’s spokesperson, Jean-Philippe Lepage, said in a letter.
He also said that in addition, the merger would be reviewed if “combined Canadian assets or revenues of the parties and their respective affiliates in, from or into Canada exceed CAD 400 million”.
Concentration
Multiplying from third-quarter production figures alone, Marine Harvest revenues from Canada were very roughly CAD 305 million. New Brunswick’s Northern Harvest was on track to sell salmon for CAD 145.3 million, so based on these values alone, a merger review by competition authorities that could take from 30 days to a year are set in motion.
Le Page said he couldn’t talk about this merger review for reasons of confidentiality. For now, the Bureau will consult with “a wide range of industry participants, such as suppliers, competitors, industry associations, customers and industry experts”.
“If the Bureau determines that a merger is likely to substantially affect competition, it may apply to the Competition Tribunal for an order to prevent, dissolve or alter the merger,” LePage wrote, adding that the Competition Act’s rules allow for a one-year period after the deal during which the Commissioner may bring an application to the Competition Tribunal challenging the transaction.
Small-scale support
With 60,000 t of salmon production between them, Northern Harvest and Marine Harvest make up from just over a half (Islandsbanki) to just under a third of current Canadian annual production (Canadian Aquaculture Industry).
Meanwhile, while the Bureau will seek a “careful analysis” of the merger to judge whether it “substantially lessens” or “prevents” competition in Canada’s salmon market, the Canadian government has stepped in to compete for smaller farmers. In December 2017, Ottawa released CAD20 million to help “small and mid-sized” salmon-farmers modernize with the latest technology.
