To the Editor,
Re: Rising food prices create cost crunch, May 7.
In this front-page article, Raimo Martella is quoted as saying: “In the distribution of food, the oil companies are a monopoly force.”
It is clear that Martella has no understanding of the oil and gas industry.
The major oil companies in Canada can be classified as a oligopoly, but they are definitely not a monopoly.
Competition law in Canada prohibits collusion among competitors to prevent the monopoly force that Martella describes.
Moreover, when the federal government created and controlled PetroCanada to obtain an understanding of the energy industry, PetroCanada was forced to compete with the other industry peers. Consumers did not benefit from PetroCanada through lower prices.
Instead, Canadian taxpayers got hosed through the acquisition of refinery, distribution and reserve assets at above fair market values.
Higher food prices are not only caused by environmental factors, but also by government intervention and monopolies such as: poultry, milk and dairy marketing boards, and the subsidization of producing alternative fuels such as ethanol from the growth of products that otherwise would be used for food.
Anthonie den Boef