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Competition Bureau reaches agreement to preserve competition in two B.C. forestry markets

OTTAWA, December 7, 2004 – The Competition Bureau filed a consent agreement today with the Competition Tribunal, addressing competition concerns in the merger of West Fraser Timber Co. Ltd (West Fraser) and Weldwood of Canada Ltd. (Weldwood). The agreement enables the forestry companies to merge while preserving choice for independent timber harvesters, wood re-manufacturers and log sellers in the northern and southern parts of British Columbia.

"It's a good outcome for competition," said Robert Lancop, Assistant Deputy Commissioner of Competition. "We've addressed the issues raised by this transaction without the need for costly and uncertain litigation."

After reviewing the proposed transaction, the Bureau had concerns that it could result in a substantial lessening of competition in two local markets. The agreement requires that West Fraser and Weldwood sell their saw mill interests in Babine Forest Products Limited, in Burns Lake and Decker Lake (Babine Timber Limited), and associated forest tenures. West Fraser also agreed to surrender certain timber harvesting rights in the Williams Lake to 100 Mile House area. The surrender will permit an offering of new forest tenures which will remove significant barriers to competition and allow a new player to enter the market or an existing one to expand its capacity.

"In this case, the parties will be able to realize cost savings arising from consolidation while preserving the benefits of competition in the supply of timber," said Mr. Lancop.

The agreement provides that if West Fraser is unable to sell the assets as agreed, a trustee will be appointed to complete the sales.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.