In January this year, the world’s largest food group, Nestlé of Switzerland, agreed to a friendly takeover of US pet-food business Ralston Purina to form a US$6.3bn worldwide pet-care business. The move, which is still being vetted by competition authorities in the US and the EU, is coming under increasingly hostile opposition from consumer groups and farmers, reports @griculture Online.
These interest groups have formed a coalition group, and their opposition to Nestlé’s takeover of Ralson Purina is the first test of its powers in fighting for harsher antitrust legislation and enforcement.
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Key members of the coalition include the Organisation of Competitive Markets, Consumer Federation of America, the Consumer’s Alliance and the Grange, described as the oldest US general interest farm organisation. One of the coalition’s figureheads, Bert Foer, president of the American Antitrust Institute, expressed concern that the Federal Trade Commission would give the go-ahead to the merger if it focuses its attention solely on market concentration. Within the pet-food market, Nestlé is strongest in canned foods, while Ralston Purina is the country’s biggest producer of dry pet foods.
However, antitrust experts including Foer have urged the FTC to address less immediately obvious issues, for example the way in which large manufactures may be able to influence consumer pricing through their supplier relationships with retailers.
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By GlobalData“We believe they (the new merged pet food company) will become the only ‘category captain’ for pet foods,” Foer said. “It will be in a positive position to punish its rivals if they don’t follow Nestlé-Ralston’s price increases.”
Conference called in Washington DC
Meanwhile, Foer and his fellow protesters have invited members of the press to attend a conference tomorrow morning [Wednesday] in Washington DC to outline their opposition to the deal which they believe will: “severely curtail consumer choices in the multi-billion dollar US pet food market.”
To view related research reports, please follow the links below:- Unleashing Opportunities in Global Pet Food: Strategies to 2010 |
