ACCC approves National Foods proposed acquisition of Dairy Farmers

Posted by Daniel Palmer on 24th July 2008

The Australian Competition and Consumer Commission has approved the proposed bid for Dairy Farmers by National Foods and Warrnambool Cheese and Butter, but raised concerns regarding the Parmalat SpA and Murray-Goulburn joint bid.

The clearance of National Foods followed their recent submission to the ACCC, which highlighted that they would be willing to licence brands and sell processing plants in order to decrease the impact a takeover would have on competition. This appeased the concerns of the ACCC that competition in NSW and South Australia could be significantly affected.

“The ACCC is satisfied that the proposed acquisition, subject to the court enforceable undertaking, would be unlikely to substantially lessen competition in the relevant markets,” advised ACCC Chairman Graeme Samuel.

Milk deal

The competition watchdog released a Statement of Issues regarding the Parmalat proposal, which outlined that they held three primary concerns about a potential acquisition of Dairy Farmers by Parmalat and Murray-Goulburn. The ACCC were concerned competition could be significantly impacted in the flavoured milk sector in Queensland, the long-life milk sector at a national level and in fresh white milk supply in the south of Queensland.

The ACCC has called for submissions regarding the Statement of Issues until August 7 and anticipate making an announcement of their final view by August 21.

Dairy Farmers has indicated that all companies with significant operations in Australia need to gain approval from the ACCC before their bids will be considered by the Board. Consequently, the announcement by the ACCC is likely to stall the bidding process.

The third bidder for the Australian dairy co-operative, Canadian-based Saputo, does not require ACCC approval as they currently have no major operations in Australia.

Information regarding the Statement of Issues can be found at the ACCC website.