On April 30, 2015, the Competition Bureau filed an application to challenge a proposed merger between two major gas retailers, Parkland and Pioneer. Parkland proposed to acquire 181 gas stations and 212 supply contracts from Pioneer in 14 communities in Ontario and Manitoba.
The Bureau claimed that the proposed merger is likely to substantially lessen competition in the already concentrated relevant markets. The Bureau estimated that the combined post-merger market shares of Parkland and Pioneer in the 14 communities would be between 39 to 100 percent. The level of competition would also be affected by the significant increase in the extent, likelihood, frequency and duration of coordination among some or all of the suppliers in the markets.
In its application, the Bureau also referred to a number of factors under section 93 of the Competition Act to support its opposition to the merger, which include:
- no alternative substitutes to fuel vehicles for consumers
- barriers to entry into the relevant markets due to market maturity, environmental and regulatory approvals, and the well-entrenched incumbency positions of Parkland and Pioneer
- insufficient effective competition remaining in the market
- elimination of rivalry between Parkland and Pioneer as a result of the merger
The Competition Bureau is seeking an order prohibiting Parkland from implementing the proposed merger, and requiring Parkland to dispose of certain assets in the relevant markets. In the interim, the Bureau will also be seeking an injunction requiring that Parkland preserve and operate independently the assets to be acquired from Pioneer until a decision is reached by the Tribunal.
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