Lactalis and Bega seek approval to acquire Fonterra’s export-linked Australian business amid competition concerns.
Interest is mounting over Fonterra’s Australian operations, with Bega Cheese (partnered with FrieslandCampina) and Lactalis both seeking regulatory clearance to bid for these assets. Fonterra had initiated a “dual-track” strategy to either sell or list its Oceania and global consumer units, aiming to refocus on processing milk domestically.
The Australian Competition and Consumer Commission (ACCC) approved Lactalis to formally engage in discussions and is publicly assessing the bid from Bega. The watchdog is evaluating whether the takeover would harm competition in areas like raw milk procurement, processing services, and the wholesale dairy supply chain.
The ACCC’s initial feedback suggests that competition may remain robust: other buyers are still present in milk sourcing regions such as Victoria and Tasmania, and the companies’ product portfolios and supply dynamics differ significantly, potentially mitigating competitive overlap.
Industry stakeholders, including the Australian Dairy Farmers association, express concern. They argue that combining two major processors could diminish farmers’ bargaining power and lead to lower farm-gate milk prices—a major risk for producers in a contracting dairy market.
While no final decision has been made, the advanced interest from Lactalis and Bega positions them strongly. With regulatory scrutiny underway and other suitors like Meiji and Saputo previously linked to the assets, Fonterra’s strategic exit remains a high-stakes pivot with implications for dairy supply chains across Oceania.
Source: Dairy News Australia – Two buyers target Fonterra
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