Canadian agribusiness giant, Nutrien, has promised the Australian Competition and Consumer Commission it will sell three merchandise stores in Western Australia, Queensland and the Northern Territory if its $469 million Ruralco takeover goes ahead.
The move is aimed at winning the ACCC's support for the acquisition.
Ruralco's stores in Broome, Hughenden and Alice Springs were identified by the ACCC last month as providing the only competitive merchandise alternative to Nutrien's Landmark business in these remote locations.
The ACCC also raised fears about the impact of wholesale competition nationally in the rural marketplace if the merger went ahead.
In particular it was uneasy about potential discrimination against other independent retailers who currently sourced supplies from Ruralco's CRT wholesale division.
Nutrien, which has owned Landmark's 225 store agency and wholesale merchandise network since 2010, has been warned by the competition watchdog its offer to sell the sites does not guarantee the ACCC will clear the takeover.
Nutiren's undertaking to sell three of its Landmark stores after the takeover would also involve the ACCC giving its seal of approval to the purchasers.
The undertaking ... does not seek to address possible issues at the national or wholesale levels
- Mick Keogh, ACCC
ACCC deputy chairman, Mick Keogh, said it would seek public feedback on the Canadian chemical and fertiliser giant's proposal.
"The undertaking seeks to address only local issues in Broome, Alice Springs and Hughenden, and does not seek to address possible issues at the national or wholesale levels," Mr Keogh said.
"At the national level, the transaction combines two of the biggest suppliers of rural merchandise to farmers.
"It also combines two of the largest wholesalers to independent retail outlets.
"We are continuing to investigate the potential impact of this transaction at the national and wholesale levels."
Aside from its wholesaling business, Landmark's interests range from farm input sales and advice to livestock and property selling, wool broking, livestock export services and agricultural insurance broking.
Takeover target, Ruralco, provides similar services and owns or part-owns 106 rural merchandise stores under its CRT and Town and Country brands.
The ACCC was now seeking views from market participants on whether the Landmark commitment to sell was sufficient and whether it would be likely to alleviate competition concerns in the local markets identified.
Parties wishing to make submissions have until next week (August 5) to let their views be known.
A final decision on the matter is anticipated by August 15.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
