ACCC commences informal review of a proposed acquisition by Lactalis

The ACCC (Australian Competition and Consumer Commission) has commenced an informal review under the Informal Merger Review Process Guidelines as BSA S.A.S. (Lactalis) proposes to acquire the following businesses within the Fonterra Co-operative Group:

• Fonterra’s consumer business globally; and
• Fonterra’s dairy ingredients and food services businesses in Australia.

This informal process is a voluntary mechanism that allows the business to obtain an opinion from ACCC about whether or not the proposed acquisition is likely to have competition implications before the acquisition plans are finalised. It doesn’t provide legal protection; it is only designed to provide the ACCC’s perspective.

Lactalis is a global dairy group headquartered in Laval, France. In Australia, it has approximately 500 farmer-suppliers across New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia. Lactalis processes raw milk into dairy products such as fresh milk, cheeses, chilled yellow spreads and yoghurts, as well as dairy ingredients such as milk powders. It supplies products to retail and foodservice businesses through brands such as Pauls, Vaalia and Kraft.

Fonterra is a New Zealand-based dairy cooperative which sources raw milk from around 650 Australian farmers in Victoria, Tasmania, and parts of South Australia and New South Wales. In Australia, Fonterra acquires raw milk and processes it into a range of dairy products as part of its ingredients, consumer and foodservice businesses. Its brands include Mainland, Western Star and Perfect Italiano, and it also holds the licence to the Bega brand for natural and processed cheddar cheese products in Australia.

Lactalis and Fonterra overlap in various parts of the dairy supply chain, including:

• the acquisition of raw milk from dairy farmers and milk brokers, primarily in Victoria and Tasmania;
• the processing and production of dairy products (including cheese, dairy spreads, cream, custard and yoghurt) and dairy ingredients (including milk fat, whey powders, lactose and dairy powders); and
• the supply of dairy products and dairy ingredients to retailers and foodservice outlets.

Submissions are invited from interested parties in relation to Lactalis’s proposed acquisition of businesses within the Fonterra Group by 16 May 2025.

The provisional date for the announcement of the ACCC’s findings is 26 June 2025.

Image credit: iStock.com/Anna Puzatykh