Watchdog seeks more information, before deciding on Coles purchase

Coles intends to acquire Saputo Dairy Australia's facilities at Laverton and Erskine Park, (NSW).

The Australian Competition and Consumer Commission was set to announce its decision tomorrow (Thursday).

It has since suspended that timeline "pending receipt of information from the parties," a spokesman said.

"The ACCC will announce a proposed decision date in due course."

The inquiry commenced in May, focusing on the impact of the proposed acquisition on competition.

ACCC officers told interested parties it was was seeking their views on the impact of prices and terms of supply farmers received for raw milk in NSW and Victoria.

It is also looking at whether the proposed acquisition was likely to give Coles the ability and/or incentive to foreclose other dairy processors, wholesalers or retailers.

The ACCC is looking at the proposed purchase under Section 50 of the Competition and Consumer Act, which prohibits acquisitions likely to have the effect of substantially lessening competition in a market.

The delay comes as Dairy Australia released its latest Situation and Outlook report, outlining milk processor pain for the September quarter.

Australian Dairy Farmers president Rick Gladigau said the ACCC should not rush to assess the proposed deal.

"We are fine with the delay, as long as it means the ACCC are seriously looking into the fact farmers won't be left out in the cold on this," Mr Gladigau said.

"We want to make sure farmers are looked after, that they are going to have competition for their milk.

"In some regions there is not a lot of competition."

He said the deal had long-term implications for farmers.

"I have seen how this could play out, given the small amount of milk Saputo is putting through those plants already for their own Devondale brands," he said.

"It's an easy excuse, in a couple of years, to say, it's just not worth it, milk is too expensive for us to get from farmers, so its easy to get out.

"I can read them like a book, these guys."

A Coles spokesperson said the company continued to work with the ACCC and was providing more information, in relation to the acquisition of the plants.

In July, Coles chief executive Leah Weckert said in July the company saw no lessening of competition in "any relevant market."

She told the ASX Coles was already taking about 80 per cent of the volumes, from the facilities and would continue to provide milk to Saputo, under a tolling arrangement.

"We remain confident that any outstanding concerns can be addressed so that the proposed transaction can proceed to completion," Ms Weckert said.