Competition Bureau clears BVD-Cenovus deal with fuel station sale
GATINEAU, Que. — Canada’s antitrust watchdog has reached a deal with Brampton, Ont.-based BVD Petroleum Inc. to protect local competition and prevent potential price spikes at the pumps in Ontario's Niagara Region.
The Competition Bureau announced Thursday that it has entered a legally binding consent agreement with BVD regarding its proposed acquisition of retail fuelling assets from Calgary-based Cenovus Energy Inc. and Husky Canadian Petroleum Marketing Partnership.
According to the Bureau, the deal as originally structured would have likely reduced competition between a Petro-Canada and an Esso station located close to each other along the Queen Elizabeth Way (QEW) near Glendale, situated between St. Catharines and Niagara Falls.
"Competitive gasoline markets are necessary to keep prices in check," interim competition commissioner Jeanne Pratt said in a news release. "This agreement will preserve competition for Canadians travelling between St. Catharines and Niagara Falls by ensuring that BVD’s acquisition does not eliminate important local competition."
The regulator noted that gas stations in close proximity typically compete directly for drivers by reacting to each other's pricing. Without an intervention, the Bureau determined the merger would eliminate a key local competitor, potentially driving up prices for motorists in the area.
To resolve the watchdog's concerns, BVD has agreed to sell its Petro-Canada gas station and Petro-Pass cardlock facility in the area to a buyer that must be approved by the commissioner. BVD operates Petro-Canada and Petro-Pass branded stations, including 16 truck stops, while Calgary-based Cenovus operates Esso branded stations.
The Bureau, which reviews mergers to ensure they do not harm competition, emphasized that it does not regulate fuel prices directly, as Canadian companies are free to set their own rates. However, it called effective merger control its "first line of defense" in safeguarding consumers against affordability challenges.
The consent agreement has been registered with the Competition Tribunal and carries the force of a court order.
