Irving, Imperial and Competition

Can someone who understands the law better than I explain why, if the following sentence (from this CBC story) is true:

Under an agreement between the oil companies, Irving Oil will become the the distributor for all of P.E.I. and New Brunswick, while Imperial Oil will be the distributor in Nova Scotia and Newfoundland.
Then this law which says, in part:

45. (1) Every one who conspires, combines, agrees or arranges with another person

(a) to limit unduly the facilities for transporting, producing, manufacturing, supplying, storing or dealing in any product,

is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million dollars or to both.

has not been contravened?


Alan's picture
Alan on October 4, 2002 - 17:55 Permalink

That is an excellent question…unfortunately, I believe the competition law requires a complainant to trigger a review of commercial activity. You could add to this question food wholesaling as well.

Doug's picture
Doug on October 5, 2002 - 17:41 Permalink

Monopoly is quite common in industry that requires HUGE amounts of capital to start and maintain eg. telephone, cable, power, and natural gas distribution. It is ususally a case where one company ends up dominating a field and buying up all the competition. Conspiracy or not it certainly was Irving’s intention to dominate the oil/gas distribution in this region by outperforming and eventually absorbing the competition. Aliant is another example. The goal of business is to make profit and grow. Whether or not it is a conspiracy or not is debatable.
In principle one could compete against Irving in the distribution of oil and gas, but in reality one would not unless they had the capital to establish a distribution system that would compete. Even if they did build it from scratch the return on the investment would not warrent the effort and risk.
Regardles of what people say about the Irving companies and conspiracy, they do provide a service and are a key employer in a region that has been in the economic toilet for over a hundred years.
I like to use the phrase “better the devil you know than the devil you do not know” when talking about the Irvings. Would you rather an American company (one with an executive that does not have a vested interest in this region) have the contractt?

Peter Rukavina's picture
Peter Rukavina on October 6, 2002 - 03:39 Permalink

I don’t doubt Irving’s contribution to the region and to the Island. But just because they’re a big company that employs Islanders and contributes to the economic development of the area, are we to overlook their collusion with a competitor to split up the terriitory for each other’s benefit?

doug's picture
doug on October 6, 2002 - 17:31 Permalink

I understand the problem. Unfortunately government intervention is not going to help the situation. The government is just as guilty when it comes to collusion and conspiracy. Plus they are also incompetent when it comes to long-term business sense. So again, the devil you know…

Alan's picture
Alan on October 7, 2002 - 11:47 Permalink

Thank God we do have the Competition Act at bay. What would happen if it were enforced woul not be the lss of oil and gas sales but (wait for it) competition in the market. Wilsons or someone else woud take on the challenge and make the bucks.

stephen's picture
stephen on October 7, 2002 - 20:56 Permalink

The key is the phrase “limit UNDULY” — these guys are coming to an agreement as to how to split up the market — I think Pepsi and Coke did something similar with Russia and China if I’m not mistaken. The catch would be if the oil companies split up the provinces and then price gouged the public in the provinces where they now had a monopoly. And of course government is in the pocket of big business and the Irving family are the feudal overlords of New Brunswick,but that goes without saying.