Olymel invoking force majeure clause; wants out of hog contracts

Olymel has notified pork producers in Ontario who ship to its processing plants in Quebec that it intends to exercise the force majeure clause due to the COVID-19 pandemic, according to industry sources.

By invoking the clause, the company would no longer be required to purchase market hogs under the terms of the contracts it has with producers.

Olymel has not responded to requests for comment or further information.

The company shut down operations at its plant in Yamachiche, Que., for 14 days, beginning March 29, after nine employees at the facility tested positive for COVID-19. The temporary closure affects approximately 1,000 employees.

Olymel is a subsidiary of Sollio (formerly La Coop federee) and employs over 10,000 people at more than a dozen hog and poultry processing facilities, most of which are in Quebec. The company also has a hog processing plant in Red Deer, Alberta.

Pork producers in Ontario normally ship around 20,000 pigs into Quebec each week, according to Ontario Pork. A source says Olymel says it wants to continue to purchase Ontario hogs, but at a reduced volume and for the “duration of the pandemic.”

A hearing is also set for Monday, April 6th. If successful, Olymel will be released from its obligation requiring it to take Quebec hogs ahead of those from other provinces.

More to come…

Related: Olymel shuts down Quebec plant for 14 days, as staff test positive for COVID-19

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