Australia’s Competition Watchdog Reviews Major Dairy Acquisition.
Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), has initiated a formal review of a significant proposed acquisition in the dairy sector. The review focuses on Bega Cheese Limited’s plan to acquire certain consumer and dairy ingredient businesses from the Fonterra Co-operative Group. This move is a crucial step in Fonterra’s broader strategy to divest and streamline its operations, particularly in Oceania and Australia.
The ACCC’s review will specifically examine potential competitive concerns that the merger could pose. It aims to determine whether the proposed acquisition would lead to a significant reduction of competition in key areas of the dairy supply chain. For the agribusiness sector, this is a critical process that ensures a healthy and fair market for all participants, from raw milk producers to end consumers.
Central to the ACCC’s investigation is the impact on raw milk acquisition. Both Bega Cheese and Fonterra are major purchasers of raw milk from Australian dairy farmers. The ACCC will scrutinize whether combining these operations could reduce competition for milk supply, potentially affecting the prices paid to farmers. This is a vital point for the dairy community, as it directly links corporate consolidation to the economic well-being of producers.
The review also extends to the milk processing and production segments, as well as the supply of finished products to both retail and foodservice operators. The ACCC is concerned with maintaining a competitive marketplace at all levels of the supply chain. The deadline for industry stakeholders to submit their input is August 15, 2025, and a provisional date for the ACCC’s final findings has been set for September 25, 2025.
This acquisition review serves as a powerful reminder of the complex interplay between corporate strategy, government regulation, and dairy economics. It highlights the role of competition bodies in safeguarding the interests of both producers and consumers, ensuring that major mergers do not lead to a loss of competition or an unfair marketplace. The outcome of this review will set an important precedent for the future of the Australian dairy industry.
Source: Foodbev.com: ACCC reviews Bega Cheese’s proposed acquisition of Fonterra’s consumer operations
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