Canada farm groups want curbs on Agrium's clout

Wed Jun 6, 2012 2:50pm EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Two influential Canadian farm groups will urge the country's Competition Bureau to scale back Agrium Inc's (AGU.TO: Quote) (AGU.N: Quote) proposed purchase of Viterra Inc VT.TO assets, saying Agrium might become too powerful in the sale of fertilizer and other crop supplies.

In a C$6.1 billion ($5.9 billion) deal, global commodities giant Glencore International PLC (GLEN.L: Quote) will buy Viterra, Canada's biggest grain handler, this summer, pending regulatory approval.

It will then sell off some of Viterra's parts to farm retailer and fertilizer producer Agrium and to privately owned Canadian grain handler Richardson International Ltd.

The takeover itself faces little opposition from farmers, some of whom relish the global marketing muscle Glencore would bring to the Canadian Prairies.

Agrium's role has struck a nerve, however, as it would purchase 232 Viterra farm-supply outlets in a package worth C$1.15 billion, becoming the dominant Canadian retail seller of fertilizer, seed and chemicals.

One group, the Western Canadian Wheat Growers, plans to ask the Competition Bureau to force Agrium to divest some outlets in areas where there would be little competition for farmers' dollars as a result of the deal.

"Within a certain radius, there's got to be good competition," said Wheat Growers' Executive Director Blair Rutter.

Some towns have only Agrium- and Viterra-owned outlets, and the Competition Bureau should also look at which independent dealers are supplied by Agrium to get a clear picture of how much competition there is, especially in southern Alberta, Rutter said.   Continued...

Michael Wilson, president and chief executive officer of Agrium, addresses shareholders at the company's annual general meeting in Calgary, Alberta, May 12, 2010. REUTERS/Todd Korol