The Australian Competition and Consumer Commission intends to oppose the proposed acquisition of Goodman Fielder’s edible fats and oils business by Cargill Australia.
Agribusiness and food giant Cargill entered into an agreement to buy the commercial edible oils and fats business of Australian food group Goodman Fielder in December for A$240m (US$219.9m).
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However, ACCC chairman Grant Samuel said an investigation had found the deal would lead to a “significant concentration of refining assets in Australia” and remove “one of only a small number of competing refiners that offer a wide range of fats and oils products”.
Samuel said: “The ACCC also concluded that any potential competitors face significant difficulties in viably obtaining certain inputs necessary to supply a number of edible fats and oils products, limiting their ability to provide an effective competitive constraint post-acquisition.
“Inquiries by the ACCC indicated that for a number of fats and oils products, Goodman Fielder and Cargill have been each others closest competitor, and that both companies vigorously compete to supply bulk fats and oils products to a number of large customers.
“The findings led the ACCC to conclude that the proposed acquisition would likely result in a substantial lessening of competition in markets for the supply of certain refined oil products, in particular those products used by industrial food manufacturers to make a range of food products.”
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By GlobalDataThe basis upon which the ACCC has reached its decision will be outlined in a Public Competition Assessment, available in due course on the ACCC’s website, www.accc.gov.au, through Public Competition Assessments.
