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News

POULTRY PROCESSING PLANT

TheReview Wednesday, September 12,1990 — A2

Continued from Page Al

in at levels exceeding the weekly
fresh chicken demand,” the report
said.

Hemani charges there was price
fixing among the three top proces-
sors in the province.

Hemani also said the marketing
board was negligent by waiting

until fall to penalize growers for
Overproduction.

“Right from the beginning they
were making sure I wouldn’t sur-
vive,” Hemani said. “I couldn’t
do it without help from the mar-
keting board.”

The report further states the
board issued an order to penalize
individual growers who over-
produced for three consecutive
cycles.

As well, the board announced
the signing of a two-year contract,
with J.D. Sweid Ltd. of Bumaby,
approving purchase of 20,000
birds per week with increases to
30,000 per week in January, 1991,
and 40,000 per week in July, 1991.

In addition, a 5,000-bird per-
week processed quota is being
offered to each grower who pro-
vides additional space by August
1991.

The board estimated losses of
$247,000 to growers supplying
Island Poultry when the plant was
placed in receivership July 26,

then closed July 31. Those losses
will likely be covered through
funds collected by a 30-cent per
bird marketing board permit fee.

The report also said: “Should
Island Poultry open under new
owners, the board will not enter-
tain any requests to resurrect the
spot market,” referring to a
15,000-bird per week increase of
quota provided to Island Poultry in
Apuil.

Board chairman Bartel said last
week: “It’s up to the plants to find
their own product. Really, the
problem is there is only so much
product on the Island. They built a
plant on the Island that needs

200,000 birds per week to make it
efficient.”

Stuart said both parties who
made proposals wish to operate
the plant in the same location,
rather than dismantle it. Negotia-
tions are “in an active stage and
hopefully something will happen
in the next little while.”

Island Poultry received a $1.6
million loan guarantee from the
province’s agriculture ministry in
April 1988:

B.C. Agriculture poultry indus-
try specialist Stewart Paulson said
Monday that industry statistics
shown an open market system is
not viable but “we have a strong
healthy viable industry that we are
doing very well with.”

He said Island Poultry’s
increase in quota in April exceed-
ed the growth in the market.

“The fact is, Shergar Enterprises
(island Poultry) got 15,000 birds
(a 40 per cent increase) when the
test of the plants got less than
eight per cent,” Paulson said.

He said the marketing board
cannot be blamed for increasing
production, to go to higher vol-
umes, although it depressed the
market, because the demand was
there and the benefit to the con-
sumer was there.

In real terms, consumers were
paying 20-30 per cent less for
fresh chicken this summer, Paul-
son said.

“They can’t respond to both
sides of the equation,” Paulson
said. “Conflicting requests come
in from every area.”

Bartel said the marketing board

Tan into problems when the gov-
emment asked it to give the new
processor help to get going.

“Very reluctantly we did this
and it left growers with a quarter-
million dollars of unpaid-for pro-
duct,” Bartel said.

Transferring quotas from Lower
Mainland plants to the Island is
not possible considering an invest-
ment by Lower Mainland growers

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of $15 per square foot of barn
space.

“For us to close barn doors here
to accommodate an Island proces-
sor isn’t fair,” Bartel said from his
Abbotsford home. “We cannot
accommodate Island Poultry to the
detriment of growers here.”

Bartel said the allowed overpro-
duction this spring was to allow
more product to satisfy the spot
market requirement. “When the
plant closed we canceled all pro-
grams and we're not prepared to
reopen them.”

Should someone buy the plant,
Bartel said: “We can give them a
licence and they can go out and
fight for product like everyone
else.”

Hemani said a court injunction
to prevent Island Poultry from
receiving the 15,000 birds per
week spot market increase was
sought by some processors:

But he claims that was a smoke-

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screen because growers for those
plants were overproducing, caus-
ing the price to decrease.

Hemani said that since the plant
was closed, putting 65 people out
of work, market prices have
increased to the point where the
plant could have profited with
50,000-birds per week.

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