The Australian Competition and Consumer Commission has announced a delay in presenting its findings, on the proposed acquisition of two Saputo milk processing plants by Coles.
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It was due to present its final findings on the proposed acquisition on Thursday September 14, but has delayed its report indefinitely, pending receipt of further information from the parties, i.e. Coles and Saputo.
eastAUSmilk government relations manager Mike Smith said that eastAUSmilk had at several times during the ACCC review made submissions raising possible consequences of a completely unregulated acquisition. eastAUSmilk had urged the ACCC to ensure, if the acquisition proceeded, that conditions were attached to it which protected dairy farmers from the effects of reduced competition which would arise.
In July this year, ACCC published a statement of issues outlining its competition concerns, and asked for further submissions.
The two milk processing plants in question are at Laverton North in Victoria and Erskine Park in New South Wales, and the ACCC expressed serious concerns at reduced competition in NSW, and impacts on other processors. In eastAUSmilk's view, this impact could be felt from central NSW up into southern Queensland.
While many NSW members of eastAUSmilk have a good working relationship with Coles, some dairy farmers are concerned that if Coles owns the NSW facility it could impact where northern NSW and southern Queensland milk is processed, and hence the viability of production.
The ACCC review is only part of the story, though. Its review is conducted on very narrow grounds - the incremental change to competition in the market, caused by the proposed acquisition. It is not allowed to:
- Consider social aspirations shared by all Australians - ongoing access to locally sourced fresh milk, a vibrant dairy industry, regional community resilience, fairness between big business and small, and so on.
- Address the total effect on competition that the acquiring company will have.
- Treat this as a precedent for agricultural supply chain vertical integration.
The ACCC says it will announce a revised decision date in due course.
