The Bureau reaches agreements to address competition concerns in the retail gas industry in Quebec, Ontario and Atlantic Canada.
News Release
Alimentation Couche-Tard purchases CST and sells part of CST’s assets to Parkland
June 27, 2017 – OTTAWA, ON – Competition Bureau
The Competition Bureau announced today that it has reached separate agreements with Alimentation Couche-Tard Inc. (Couche-Tard) and Parkland Industries Ltd. (Parkland) to address competition concerns arising from Couche-Tard’s purchase of CST Brands Inc. (CST), the owner of the Ultramar brand, and the subsequent sale of the majority of CST’s Canadian assets to Parkland. These agreements preserve competition in the retail sale of gasoline in Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador.
The Bureau concluded that, if allowed to proceed, Couche-Tard’s proposed acquisition of CST would likely result in a substantial lessening of competition in numerous local markets in Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador. To address this concern, Couche-Tard agreed to sell 366 gas stations and gasoline supply contracts to Parkland and one gas station to Philippe Gosselin & Associés Limitée.
In the subsequent sale of assets to Parkland, the Bureau concluded that a substantial lessening of competition in several markets in Ontario was likely. In those markets, Parkland agreed to sell nine gasoline supply contracts to MacEwen Petroleum Inc. (MacEwen) or McDougall Energy Inc. In addition, there are two other markets where the Bureau found that Parkland was not a suitable purchaser. In the latter, Parkland also divested certain of its own assets to MacEwen, prior to the Bureau entering into either of the consent agreements.
The Bureau is confident that these agreements will address the competition concerns identified and support the objective of preserving competition and fair retail gasoline prices for Canadians.
Quotes
“Competition in the gasoline industry is an area of significant interest to Canadian consumers. The Competition Bureau does not hesitate to take action, when appropriate, to address competition concerns in this important sector.”
John Pecman,
Commissioner of Competition
Quick Facts
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Couche-Tard operates a network of convenience stores and retail gas stations across Canada. The businesses are operated primarily under the Couche-Tard and Mac’s brands.
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CST is one of the largest independent retail and wholesale distributors of motor fuel, convenience merchandise and services in North America. CST operates primarily under the Ultramar brand.
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Parkland delivers gasoline, diesel, propane, lubricants, heating oil and other petroleum products to motorists, businesses, households and wholesale customers in Canada and the United States.
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During the course of its review, the Bureau conducted interviews with various market participants, including retail gasoline station operators, municipal agencies and an industry expert; reviewed documents and information provided by the parties and third parties; and analyzed transaction-level data, as well as data on prevailing retail gasoline pricing in specific regions of interest.
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Under the Competition Act, the Bureau has a mandate to review mergers to determine whether they are likely to result in a substantial lessening or prevention of competition. In reviewing mergers, the Bureau considers many different elements, including the impact of proposed transactions on the level of economic concentration in the relevant industry.
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