ACCC will not oppose acquisition of Pfizer Nutrition by Nestlé

The Australian Competition and Consumer Commission (ACCC) has decided not to oppose the proposed acquisition of Pfizer Nutrition by Nestlé.

Pfizer Nutrition and Nestlé are two of the three largest suppliers of infant formula and toddler milk in Australia. The ACCC undertook extensive consultation on the proposed acquisition with a strong focus on the extent to which the removal of Pfizer Nutrition would reduce competition, since Pfizer is one of Nestlé’s closest competitors in the supply of infant formula and toddler milk.

“The ACCC had significant concerns that without the undertaking, the proposed acquisition would further increase concentration in already concentrated markets, where barriers to entry and expansion are high,” ACCC Chairman Rod Sims said.

“If the proposed acquisition were to proceed in Australia, the number of major suppliers of infant formula and toddler milk in each of the distribution channels would be reduced from three to two, and our inquiries indicated that this would be likely to substantially lessen competition in the supply of infant formula and toddler milk.”

The ACCC has accepted a court-enforceable undertaking from Nestlé that the company will sell an exclusive 10-year licence for Pfizer Nutrition’s infant nutrition S-26/SMA brand portfolio in Australia, followed by a further 10-year ‘blackout’ period during which Nestlé would not be permitted to re-enter the markets with Pfizer’s brands.

For more information on the acquisition, click here.