ACCC won't opposed Bega's bid for WCB
Bega Cheese’s proposed acquisition of Warrnambool Cheese and Butter (WCB) will not be opposed by the Australian Competition and Consumer Commission (ACCC). The ACCC has reviewed the proposed acquisition at Bega’s request following its offer to acquire all shares in WCB.
“The ACCC considered that there was limited overlap between Bega and Warrnambool Cheese and Butter in relation to the acquisition of raw milk in the dairy region in south-west Victoria and areas of northern Victoria,” said ACCC Chairman Rod Sims.
“The ACCC concluded that a merged Bega and Warrnambool Cheese and Butter would continue to be constrained by other dairy manufacturers that they compete more closely with in the acquisition of raw milk, including Murray Goulburn and Fonterra.
“Murray Goulburn and Fonterra are also the largest suppliers of each of the processed dairy products supplied by Bega and Warrnambool Cheese and Butter, and would be likely to competitively constrain the parties, in the event that they merge, in the future.”
The ACCC recognised that many dairy manufacturers in Australia currently export significant quantities of the relevant dairy products supplied by Bega and Warrnambool Cheese and Butter and would be able to redirect exports into the domestic market to increase supply in Australia.
The ACCC also found that significant volumes of dairy products are being imported into Australia. Currently, most imports are from New Zealand, but imports from the United States have been increasing in recent years.
In addition to competition from domestic dairy manufacturers, imports are also likely to exert competitive pressure in the wholesale supply of the dairy products supplied by Bega and WCB, the ACCC said.
To reach its decision, the ACCC consulted a range of interested parties, including dairy farmers, rival dairy manufacturers, wholesalers of dairy products, customers of bulk and packaged dairy products and dairy industry bodies.
The ACCC’s decision is available at www.accc.gov.au/MergersRegister.
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