Saputo takeover of Murray Goulburn gets ACCC green light
Murray Goulburn and Canadian dairy company Saputo, which owns Warrnambool Cheese and Butter, both acquire milk from farmers in south-west Victoria and south-east South Australia, including in areas around Warrnambool and Mt Gambier.
The ACCC raised concerns Saputo owning the region’s two largest plants, both near Warrnambool – its current Allansford plant and Murray Goulburn’s Koroit plant – would have substantially reduced competition for the purchase of raw milk in the region, leading to farmers being paid less, at least in the medium term.
Sale of plant agreed
In response to the ACCC’s concerns, Saputo offered an undertaking that it would divest the Koroit plant within a specified period to a buyer that will need to be approved by the ACCC.
“Saputo’s divestiture undertaking has remedied the ACCC’s competition concerns about the Koroit plant,” ACCC chairman Rod Sims said.
“The undertaking creates an opportunity for a viable competing milk processor to enter or expand in the local region. When approving a new owner of Koroit, we will focus on its ability to be a strong and effective competitor for raw milk in the region.”
Sims said the ACCC heard from and spoke with many farmers who expressed concerns with the ACCC intervening in this transaction in the short term because they wanted certainty and stability after a bumpy ride with Murray Goulburn.
“I want to assure them that our aim is to put in place an outcome that works in their best interest by promoting competition in the medium to longer term while minimizing short term uncertainty,” Sims said.
No impact on sale
The undertaking also includes details of transitional milk supply arrangements and independent management for the plant until it is sold.
Saputo must allow farmers who want to transfer their milk supply to the purchaser of the Koroit plant to do so.
Murray Goulburn has confirmed that Saputo divesting Koroit will not impact on the terms of Murray Goulburn’s asset sale to Saputo, including the consideration Murray Goulburn shareholders will receive from the sale.
The sale of the Murray Goulburn assets to Saputo is subject to conditions that include approval by an ordinary resolution of Murray Goulburn's voting shareholders and approval by the Foreign Investment Review Board.
