Bunge-Viterra deal ‘effectively ends competition’ says NFU

Glacier Farm Media | MarketsFarm – The National Farmers Union denounced the approval of the Bunge-Viterra merger in a statement released on Jan. 17. The NFU said the multi-billion dollar deal “effectively ends competition in Canada’s agricultural commodity sector,” as it creates the world’s largest agricultural commodity trader, and it will control 40 per cent of the Canadian grain market.

“Both the degree of market power concentration and the specific ways Bunge and Viterra assets are structured will increase the merged company’s ability to annually extract hundreds of millions in excess profits from Canadian farmers – and by extension, from our communities and the Canadian economy as a whole,” said the NFU.

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The NFU said 70 per cent of the world’s grain market will now be controlled by four companies: Bunge along with rivals ADM, Cargill and Louis-Dreyfus. In Canada, the quartet would control 88 per cent when Bunge’s one-quarter share in G3 is included. The farmer organization pointed out when a concentration ratio of more than 40 per cent is attained that’s considered monopolistic.

As well, in April 2024, the Competition Bureau surmised the Bunge-Viterra deal would likely hurt competition in Canada. A similar finding was reached in a study by the University of Saskatchewan, which estimated a C$770 million loss in grain revenues for farmers each year.

The NFU said the federal government’s conditions put on its approval are not enough. Those include selling off six elevators, Bunge investing C$520 million, limiting Bunge’s influence on G3, canola oil price protections for certain purchasers in central and Atlantic Canada, and keeping Viterra’s head office in Regina for five years.

Meanwhile, the federal government and Bunge stated the deal with its conditions will serve the public interest.