Murray Goulburn’s takeover by Saputo has been given the thumbs up by the competition regulator after the global dairy giant agreed to offload the Koroit milk plant.
The Australian Competition and Consumer Commission had been worried that Victorian farmers would receive less for their milk if the Canadian firm added Murray Goulburn’s Koroit plant to its nearby Allansford plant.
But Saputo has given a court-enforceable undertaking to divest Koroit following purchase, easing the ACCC’s concerns.
ACCC chairman Rod Sims said the regulator was mindful of farmers’ recent experiences with Murray Goulburn, which responded to financial pressures by repeatedly cutting the farmgate milk price it paid suppliers.
“We 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,” Mr Sims said.
“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 minimising short-term uncertainty.”
Mr Sims said the ACCC would need to run the rule over the eventual buyer of the Koroit plant near Warrnambool.
“The undertaking creates an opportunity for a viable competing milk processor to enter or expand in the local region,” Mr Sims said.
“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.”
The agreement to divest Koroit will not affect the terms of Saputo’s bid for Murray Goulburn, which needs approval by Murray Goulburn shareholders and the Foreign Investment Review Board.