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National Beef Promotion Agencies To Be Merged?

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The much-anticipated report on the merger of Canada’s beef promotion agencies was released Jan. 6 at a news conference in Calgary by the Canada Beef Working Group (CBWG).

The move would see the Beef Information Centre, the Canada Beef Export Federation and the Canadian Beef Cattle Research, Market Development and Promotion Agency rolled into one super agency called Canada Beef. The new organization would research, promote and sell Canadian beef at home and abroad.

The working group, composed of representatives from cattle producer organizations, the two promotion agencies and beef processors, was mandated to study the merger issue and to make recommendations.

Brad Wildeman, CBWG cochair, said the idea to seek a merger of the Beef Information Centre and the Canada Beef Export Federation has been suggested by provincial cattle producer groups for a number of years. Both marketing agencies had in the past commissioned studies into the idea, which suggested a type of strategic alliance to improve efficiencies. However, neither agency was able to move forward with the suggestion and the CBWG was established in an attempt to resolve and address the merger concept.

The CBWG commissioned a study into the issue five months ago that covered all aspects of the merger including funding, governance, previous studies and other options. The recommendation was to create a single promotion and marketing agency called Canada Beef. The report was independently reviewed by the George Morris Centre and business consultant Brian Hayward.

“It will now be up to the directors of BIC and CBEF to make a decision on these recommendations,” said Wildeman.

The report recommends that the two marketing agencies be merged into the Canadian Beef Cattle Research, Market Development and Promotion Agency known as the national checkoff agency (NCOA). That agency collects and distributes national checkoffs on domestic cattle sales and beef and cattle imports. Wildeman said that for logistical and legal reasons, the national checkoff agency needs to be maintained, which means the two marketing groups will be merged into a restructured NCOA. That restructuring of the NCOA will require proclamation amendments from provincial cattle producer organizations and governments.

The new agency would not be involved with policy advocacy. Ben Thorlakson, a CBWG member said, “Field staff will continue to gather market intelligence, but that information will be used by others such as the national cattle producer groups to advocate trade policy issues.” The report recommends the establishment of an International Beef Trade Policy Advisory Committee to make policy recommendations to advocacy organizations.

The CBWG report recommends Canada Beef have 12 members composed of one each from the six major cattle-producing provinces, one from the remaining provinces and one from the province with at least 40 per cent of production.

Wildeman said, “Alberta has already said that they would give that additional membership to a cattle feeder representative.”

The remaining members of Canada Beef would represent beef processors, importers and exporters.

Savings

The report anticipates savings of $1.3 million with the merger. Most of that will come from staff salaries at $800,000. Wildeman said that those savings could be invested in programs.

“National checkoff income will be going down as the national cattle herd is reduced so we will need that additional money,” he said. However, the additional income will be offset at least in the first year or two with anticipated merger transition costs of about $1.2 million

The report anticipates that 12 staff positions will be lost in the transition. The three present CEO/president positions will be consolidated into one. Wildeman said that a CEO recruitment process will begin immediately after the three organizations have approved the merger recommendations.

It is anticipated that CBWG will form the transition team to oversee the merger process. Wildeman said that June 30, 2011 has been set as the consolidation date of BIC and CBEF into Canada Beef. An aggressive time-line has been recommended in approving the agreements and transition logistics.

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“ItwillnowbeuptothedirectorsofBICandCBEFtomakeadecisionontheserecommendations.”

BRAD WILDEMAN

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