ACCC should let Saputo keep MG’s Koroit plant

ACCC should allow Saputo to keep Koroit, say farmers


Dairy
NO FEARS: Anti-competitive fears were based on outdated information, said Kerry Callow, a former United Dairyfarmers of Victoria (UDV) president. Farmers have backed the sale of MG to Saputo.

NO FEARS: Anti-competitive fears were based on outdated information, said Kerry Callow, a former United Dairyfarmers of Victoria (UDV) president. Farmers have backed the sale of MG to Saputo.

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South Australian and Victorian dairy farmers have raised concerns about the ACCC's involvement in the MG sale.

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The Australian Competition and Consumer Commission (ACCC) has been accused of unnecessary interference in Canadian dairy giant Saputo’s purchase of Murray Goulburn (MG).

With the Canadian giant already owning Australia’s biggest dairy processing plant, the Warrnambool Cheese and Butter factory, at Allansford, the ACCC called on the dairy industry to comment on Saputo’s plans to sell Koroit milk factory as soon as it takes over Murray Goulburn’s processing assets. 

ACCC chairman Rod Sims said Saputo would not be able to acquire MG, as it would mean both Koroit and Warrnambool Cheese and Butter’s (WCB) Allansford factory would become part of the same company. 

Mr Sims raised concerned about a lessening of competition for milk, resulting in lower payments for farmers. 

The ACCC said if Saputo retained Koroit, one company would own about two-thirds of the milk processing capacity in South West Victoria.

But dairy farmers in Victoria’s South West who attended a Saputo supplier meeting in Heywood disputed the claims, and said the ACCC should have stayed out of the proposed sale.

Former United Dairyfarmers of Victoria (UDV) president Kerry Callow said competition concerns went back more than 40 years, previously based on the limited travel range of milk tankers.

“But they can now go to Adelaide and back,” Ms Callow said.

Newer processors, such as the Union Dairy Company, were “fairly competitive”.

“I can see UDC will be a competitive player and are willing to chase milk,” she said.

“To say there is only Fonterra and Saputo, once MG is missing, is incorrect.

“The ACCC is just standing in the way of a smooth transition (to Saputo’s ownership).

“It’s high time those still supplying MG are given some consideration. We seem to be the last people anybody gives a damn about.”

South Australian Dairyfarmers' Association president John Hunt, said producers wanted the ACCC to “step out of the way” and the deal to progress. 

“The divestment is not part of what the ACCC should be looking at,” Mr Hunt said.

He said the ACCC’s proposed dairy code would cover any competition concerns.

“The company has to adhere to a certain code of conduct and they will be monitored. The ACCC can still intervene if Saputo does step out of line,” he said. 

The ACCC and Saputo declined to comment. A final decision is expected to be announced next week. 

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