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Appeal Court Rules in Favour of Sunnymel Plant

by 5m Editor
8 June 2011, at 9:45am

NEW BRUNSWICK, CANADA - A legal hurdle has been cleared for Sunnymel to build an ultra-modern new slaughterhouse at Clair; government approval is expected soon.

For more than three years, Madawaska has been the unwilling witness to a legal guerrilla war initiated and driven by Nadeau Maple Lodge against Westco Group Inc. The Ontario-based company has just suffered another defeat that will likely prove decisive in this campaign. The ruling should finally allow Sunnymel, a company formed by Westco and Olymel to concentrate fully on building and operating its ultra-modern new slaughterhouse at Clair, New Brunswick.

In a landmark ruling handed down on 1 June 2011, the Court of Appeal has in effect upheld the decision of the Competition Tribunal rendered on 9 June 2009, dismissing Nadeau's petition to force Westco to continue selling its entire production of live chickens to Nadeau, despite the absence of any supply contract between the parties. The Court of Appeal thus confirms, in a unanimous and unequivocal judgment, that Westco's business decision to cease supplying Nadeau does not constitute a 'refusal to deal' under Article 75 of the Competition Act and that this decision is in no way illegal.

It will be recalled that in the past few months, Sunnymel has stepped up efforts to push its slaughterhouse project forward. In January, public information sessions, an important step toward obtaining environmental permits before starting construction work, provided answers to residents' questions while confirming the community's support for the consortium's proposal. Sunnymel anticipates receiving the government approvals shortly.

Westco President and CEO, Thomas Soucy, commented: "Westco is the dream of a few poultry producers who have been operating in Madawaska for a long time, and have long been planning to completely integrate their operations and slaughter their own chickens in New Brunswick. Everything is now in place to bring their project to completion. Our entire region will emerge the winner once this project is completed since Westco will remain active in transforming the poultry market in New Brunswick for years to come, which will guarantee stable, quality jobs."

This latest judgment by the Federal Court of Appeal joins a long line of decisions in Westco's favour in its dispute with Nadeau Maple Lodge. Back in 2008, Nadeau filed a complaint with Chicken Farmers of New Brunswick (CFNB) indicating that the CFNB should create a guaranteed supply system that would require Westco to supply live chickens to the Nadeau slaughterhouse. Nadeau's complaint was dismissed by the CFNB. The Farm Products Commission and the Court of Appeal of New Brunswick both confirmed the CFNB decision. In addition, an order issued by the Minister of Agriculture of the Shawn Graham Liberal government which, at the time, designated the Nadeau facility as the sole processor of chickens produced in New Brunswick, was also invalidated by the courts.

Mr Soucy added: "It is high time to recognise that there will be competition in chicken processing in the Maritimes. Nadeau and Maple Lodge can no longer control the processing of chickens in eastern Canada. For too long, New Brunswickers have been the losers in this story, which is really a private commercial dispute. It is time to encourage competition, promote investment in New Brunswick and create jobs for our region."

The goal of the Sunnymel partnership, combining the expertise of Westco, the largest poultry producer in New Brunswick, with that of Olymel, a processor with a strong presence in the Canadian market, is to serve the entire Maritimes market from New Brunswick. The project, which will have a slaughtering capacity of 450,000 birds per week, represents an investment of C$40 million and is expected to create close to 250 jobs. It will raise Sunnymel to an enviable position in the poultry industry in Canada.