Insufficient Efficiencies: Competition Bureau Forces Divestiture In Newfoundland Propane Acquisition

Canada's Competition Bureau recently released a Backgrounder explaining the results of its review of the acquisition by Superior Plus LP of various propane assets of Irving Oil Limited/Irving Oil Marketing Limited. Notwithstanding acceptance by the Commissioner of Competition that the acquisition would result in efficiencies, the Commissioner forced Superior to divest itself of certain Irving propane-storage assets to another Newfoundland competitor.

Timeline And Remedy

In December 2007, the Bureau concluded that the transaction would likely prevent or lessen competition substantially in the retail supply of propane in Central and Western Newfoundland for commercial and industrial use. A consent agreement was registered with the Competition Tribunal in May, 2008, requiring Superior to divest two bulk propane storage tanks and a tank truck in the relevant markets, and to permit Irving customers to terminate certain supply agreements without penalty¹. Superior signed