RED DEER, Alberta -- Parkland Fuel Corp., which acquired 181 Pioneer gas stations and 212 supply agreements in Ontario and Manitoba in June 2015 for $377 million (Canadian; $305.1 million U.S.), has settled litigation related to the deal with the Canadian Competition Bureau.
The bureau challenged the acquisition on the basis that it was likely to result in a substantial lessening or prevention of competition in the retail supply of gasoline in 14 markets in Ontario and Manitoba.
Parkland and the Competition Bureau filed a consent agreement to settle the litigation with the Competition Tribunal on March 29.
As part of the settlement, the agency required no remedy in six of the original 14 contested markets: Chelmsford/Azilda, Gananoque, Port Perry, Allanburg, Aberfoyle and Welland, Ontario. In two of the contested markets, Lundar and Warren, Manitoba, Parkland has agreed that for a six-year period it will not increase dealer prices relative to rack prices or delivery fees charged to dealers other than in certain circumstances. In sixother markets—Bancroft, Hanover, Innisfil and Tillsonburg and Kapuskasing, Ontario, and Neepawa, Manitoba—Parkland has agreed to divest either a fuel supply agreement with a dealer that it supplies or a corporate site in each market.
In each of these markets Parkland intends to divest or terminate a fuel supply agreement. In Kapuskasing, Ontario, Parkland has agreed to sell a corporate-owned gas station. In aggregate, Parkland estimates that the settlement will result in a reduction of sales volumes of less than 1% of the Pioneer acquisition volumes and a negligible impact on the bottom line.
“Parkland is a vigorous competitor with many strong regional and national brands. We are particularly proud of the value that the Pioneer brand brings and what it means to consumers across Ontario,” said Bob Espey, Parkland’s president and CEO. “The Settlement is consistent with what Parkland has asserted from the beginning—we do not influence pricing to dealers in order to increase prices at the pump. The remedies relate to a small number of rural markets and will only have a nominal impact on our business.”
“Most importantly, the settlement clarifies some principles, which will be very beneficial for Parkland’s retail acquisitions in the future,” said Peter Kilty, Parkland’s vice president of retail fuels and new markets.
Red Deer, Alberta-based Parkland is an independent marketers of fuel and petroleum products in Canada and the United States.
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