Blueberry growers’ suspicions of buyer collusion dismissed by competition bureau

Indigenous migrant workers harvest much of Maritime wild blueberry crop

IT HAD TO BE A CONSPIRACY. Maritime blueberry growers were certain of it. Why else would a buyer from Maine not try to outbid the dominant Canadian buyer? Why would they pay no more in Canada than the 22 cents a pound offered by Oxford Frozen Food and yet be happy to pay 45 cents a pound—more than twice as much—to growers in Maine? The Canadian growers asked the Canadian Competition Bureau to investigate. The bureau did. Then nothing.

Nothing to see here

The bureau began their investigation in 2018 with this announcement: “The Competition Bureau is investigating an allegation of anti-competitive conduct contrary to the Competition Act in the wild blueberry industry.

“More specifically, the bureau is investigating allegations contrary to the conspiracy provision. The conspiracy provision relates to prohibited agreements or arrangement between or among competitors.”

The Competition Bureau quietly folded that investigation in March 2020. It did not make that decision public. Nor did the bureau offer any other information on the matter.

Another sore point for the growers is the huge difference between what the buyers pay them and the price they charge consumers for the berries.

Ted Durning got 22.5 cents a pound for his berries in 2017—a third of what he estimated he needed to be profitable. At the same time, a grocery store in Oxford, just down the road from the Oxford Frozen Foods’ plant, was charging consumers almost 18 times as much as they paid Durning—$3.99 for a 1.3 pound bag of frozen blueberries.

A feudal economy

Oxford Nova Scotia is a tiny town of just 1,200 people, close to the border with New Brunswick, but it is the home of a big business: Oxford Frozen Foods employs over 400 employees at its Oxford plant. It is the county’s largest employer and the world’s largest grower and exporter of wild blueberries. It also operates plants and fields in New Brunswick and Maine.

Oxford Frozen Foods is part of the Bragg Group of Companies, headed by John Bragg. Canada Business magazine calls Bragg, the “undisputed blueberry baron of Canada”. Bragg nabbed the number 87 spot on the magazine’s list of Canada’s richest people in 2018.

Aside from being a blueberry baron, Bragg also owns Eastlink Communications. As of 2010, it was the largest privately owned cable company in Canada, with operations in every province except Saskatchewan and close to half a million subscribers. Eastlink takes in half a billion dollars in annual revenue.

The Bragg empire is not as big as those of other Maritime moguls like the Sobeys, McCains and Irvings but his iron-grip business practices are identical.

If ever there was a “company town” it is Oxford, Nova Scotia: close to a third of the  town’s residents work for the company and are eligible for interest-free housing loans worth up to $20,000, which are forgivable after 10 years.

Such loaning practices can trap workers, who are discouraged from switching jobs since they’d have to repay the loans.

Growers co-op refuses to toe the line

The Crossroads Blueberry Co-op, was founded before Oxford Frozen Foods, by independent blueberry growers around Parrsboro, at the far end of the Fundy shore, a few hours southwest of Bragg’s Oxford plant. The more than 100 member-growers of Crossroads stopped selling berries to Oxford Frozen Foods when they say Bragg tried to strongarm them.

Frank Quinn is president of the Crossroads co-op. He says that about 25 years ago Bragg told him the co-op had a choice: either sell all their berries to Oxford Frozen Foods, or Oxford would stop buying from the co-op altogether.

The co-op growers refused to be bullied. They decided to only sell to buyers in Prince Edward Island and Maine.

The market power of Oxford Frozen Foods has only increased since the Competition Bureau probe was launched, says Quinn. There are only a few buyers remaining in the country, with several having gone out of business since 2017.

If a smaller competitor tries to offer growers a higher price than a dominant buyer, says Quinn, that dominant buyer can simply find out who the small competitor is selling to and offer them a lower price.

Blueberries aren’t bread

Unlike the Competition Bureau case against the big grocers for conspiring to fix bread prices, the investigation into blueberry buyers conspiring to fix the price paid to growers just petered out last spring.

The investigation into bread price fixing only began after Loblaws and George Weston voluntarily went to the Competition Bureau, admitted participating in it and named other companies.

They received immunity from prosecution in exchange.

Oxford Frozen Foods is not likely to do anything like that. The official position of Oxford Frozen Foods continues to be surprise that anyone would even hint that they would ever do anything to collude with other major buyers to take unfair advantage of growers.

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