The ACCC is investigating Bega's proposed acquisition of Fonterra's Oceania businesses, seeking public views on its potential impact on competition.
Dairy Shake-Up Alert Bega Cheese Eyes Fonterra's Oceania Empire

Competition Regulator Seeks Views on Proposed Acquisition of Oceania Businesses.

The Australian Competition and Consumer Commission (ACCC) has initiated a public investigation into a significant proposed acquisition in the agribusiness sector. Bega Cheese Limited (Bega) is teaming up with Dutch-based multinational dairy company FrieslandCampina NV to submit a joint bid for certain businesses from Fonterra Cooperative Group Limited. The ACCC’s inquiry is focused on the potential impact of this deal on competition across the Australian dairy supply chain.

Under the proposed acquisition, Bega would specifically acquire Fonterra’s consumer, food service, and dairy ingredients businesses in Oceania, with a particular focus on its Australian operations. Concurrently, FrieslandCampina NV would purchase the parts of Fonterra’s global business being sold outside of the Oceania region. This dual-pronged strategy is designed to strategically divide the international assets and markets.

The ACCC has identified several key areas of overlap between Bega and Fonterra’s operations in Australia where competition could be “substantially lessened.” These include the critical acquisition of raw milk from dairy farmers in Victoria, Tasmania, New South Wales, and South Australia. The investigation also scrutinizes potential impacts on milk processing services and the wholesale supply of a wide range of dairy products—such as milk, cheese, butter, and cream—and dairy ingredients like milk powders.

To guide its investigation, the ACCC is seeking public and industry input on whether the acquisition is likely to reduce competition in these overlapping markets. The legal framework for this review is rooted in section 50 of the Competition and Consumer Act 2010, which prohibits acquisitions that are likely to have the effect of substantially lessening competition. This open call for views is a crucial part of the commission’s process to ensure a fair and competitive market for all players.

For the international dairy community, this ACCC investigation is a vital development. The outcome of the proposed Bega-Fonterra acquisition will not only reshape the competitive landscape in Australia but also provide a crucial case study in dairy economics and antitrust regulation. The inquiry’s focus on protecting competition for dairy farmers, processors, and retailers serves as a key reminder of the importance of fair market dynamics in the global agribusiness sector.

Source: Australian Competition and Consumer Commission (ACCC): ACCC seeking your views: Bega’s proposed acquisition of Fonterra businesses

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