The Australian Competition and Consumer Commission will not intervene in the proposed marketing arrangements between Bega Cheese, Bonlac Foods Limited and the New Zealand Dairy Board, ACCC Commissioner for Mergers and Acquisitions, Mr Ross Jones, said today.
Under the arrangements, Bega will market its cheese nationally through Consumer Co, the joint Bonlac/NZDB marketing venture, as well as manufacture and pack cheese for Bonlac. Consumer Co will acquire shares in Bega Cheese Trading.
Late last year the ACCC indicated it would not oppose the merger between Bonlac and the NZ Dairy Board.
"The ACCC considers it important to support rationalisation within the dairy industry that leads to the scale of production needed to compete in export markets and against major international companies," Mr Jones said. "At the same time, the ACCC is confident that these transactions will not lead to a substantial lessening of competition within the domestic market".
The ACCC has sought comments from a extensive range of market participants including retailers, wholesalers, major ingredients customers and manufacturers of competing products about various proposals mooted for the dairy industry. The ACCC found that Bonlac/Bega would still face several significant competitors such as Kraft, Tatura, Dairy Farmers and Murray Goulburn.
It was also considered that the ability of manufacturers to switch product mixes and the impact of international prices for dairy ingredient products would be likely to constrain the prices charged.