The ACCC will not stand in the way of the $600 million bid by China Mengniu Dairy for Lion’s Dairy and Drinks portfolio, which includes the Dairy Farmers, Pura, Dare and Farmers Union iced coffee brands.
The competition watchdog on Friday said Mengniu’s proposal to acquire Lion’s raw milk processing facilities in Australia would not substantially lessen competition in the Gippsland region, where Mengniu already has a presence due to a partial ownership of Burra Foods.
ACCC Deputy Chair Mick Keogh said while Burra and Lion D&D compete for raw milk, they were not close competitors.
“Our investigations concluded that dairy farmers are unlikely to switch between the two,” Mr Keogh said.
The ACCC also considered that a combined Mengniu-Lion D&D will continue to be constrained by Saputo and Fonterra, as well as a number of smaller raw milk processors in the region.
China Mengniu Dairy announced in November it would pay Japanese beverage giant Kirin $600 million for Lion Dairy & Drinks.
Lion said at the time it decided to approach Mengniu Dairy after agreeing in April to sell the specialty cheese component of Lion Dairy & Drinks to Saputo Dairy for $280 million.
The Lion brands include Dairy Farmers, Masters and Pura milk; Dare and Farmers Union iced coffee; Big M, Dairy Farmers and Pura Classic flavoured milk; Vitasoy soy milk and coconut milk; juice brands Daily Juice, The Juice Brothers and Berri; and Yoplait yogurt, under licence.
Mengniu completed a $1.5 billion takeover of infant formula company Bellamy’s in December.