Wednesday, December 3, 2014

Levinoff sale went “very well”

The auction of the Levinoff-Colbex beef-packing plant in Montreal went “very well,” according to auction manager Comisso LaRosa of Crescento Commercial Corp.

The plant was sold in pieces. None of the bidders was interested in buying it as an ongoing operation.
LaRosa said the equipment sold to buyers from across North America.

Levinoff-Colbex was bought by Quebec farmers, most of them dairy farmers, after the Canadian export market was shut off by the discovery of Bovine Spongiform Ecephalopathy (BSE, or mad cow’s disease) in a cull cow that had died in Alberta in May, 2003.

Most cull cows were bought by packing plants in the United States, so prices plunged to near nothing after the trading bans imposed by all countries.

Quebec farmers put heavy pressure on the Levinoff plant owners to sell to them and, with backing from the provincial and federal governments, they took over.

The venture never turned a profit.

The story was similar in Ontario where dairy farmers who controlled Gencor, an artificial insemination business, bought the former MGI beef-packing plant in Kitchener.

It also lost money and ended in bankruptcy, as did Levinoff.

Gencor managers called the investment a success because the prices it paid for cull cows was considerably higher than before the plant opened.

In Manitoba, a farmer-backed venture never got off the ground.

When the U.S. lifted its ban on Canadian cattle, buyers returned to Ontario and Quebec auctions and the farmer-owned plants could not match their competition.

LaRosa would not divulge total proceeds from the auction.