The Crees’ eight-year venture in food distribution is over.
The leadership of the Cree Regional Authority has ordered CREECO., the Cree-owned economic development company, to sell Servinor Food Wholesaler Inc., its money-bleeding subsidiary.
The move came in a resolution at a special Dec. 12 meeting of the Council/Board, the body that runs the CRA.
One Cree official called it a “very distressing, very disturbing” development. “Crees will just be consumers now. They will no longer be players in their own economy,” said the official, who was present at the Dec. 12 meeting.
Servinor has been losing money almost since it was first formed in 1993 and was projected to lose $1.6 million in the 2000-2001 fiscal year, said Jack Blacksmith, president of both CREECO and Servinor.
Blacksmith said CREECO. is now exploring its options, including selling Servinor or entering a partnership with another company.
“We’re leaving our doors open,” he said. “Nothing is closed on Servinor. Everything is on the table.”
But the Cree official said the Council/ Board resolution is explicit: CREECO. must sell Servinor by the end of the fiscal year, March 31.
Blacksmith said he does not know how much Servinor has lost since 1993, but he said the food wholesaler was projected to keep losing money until at least 2003.
Servinor has projected revenues of $24 million this year.
The Cree official said Servinor has cost Crees about $30 million since 1993.
The idea behind Servinor sounded like a sure winner. The company was supposed to capture the lucrative Cree food market, provide Crees with jobs and, hopefully, lower the exorbitant prices Crees pay for food.
“The food business is one of the most logical businesses to be in,” said the Cree official.
“When there is a recession, people still have to eat.”
But Servinor struggled to convince Cree communities to switch over, especially Chisasibi and Mistissini, which together account for half the Cree population.
There were complaints about the level of service. Some Cree stores were just happy with their existing wholesaler.
Servinor also hasn’t been successful in providing Crees with direct employment. Of 45 employees, only two are Cree, including Blacksmith himself.
Servinor ran into more problems when it built a massive multi-million-dollar warehouse in Val d’Or. CREECO. was accused of spending millions without proper authorization from the Cree leadership.
Worse, said another Cree official, the warehouse was built with the intent of servicing the workforce of Hydro-Quebec for the proposed Great Whale River hydro-electric project – a project Crees were at the time ferociously fighting to stop.
When the project was shelved in 1994, Servinor was left scrambling to find clients for the cavernous warehouse, the official said.
