The Australian Competition and Consumer Commission today announced that it does not propose to intervene in Swift Australia Pty Ltd's proposed acquisition of Rockdale Beef Pty Ltd.
After an extensive investigation and rigorous consultation with interested parties, the ACCC formed the view that the proposed acquisition would not result in a substantial lessening of competition in any market.
A large number of parties were consulted in the ACCC's review, including cattle producers, feedlot operators, abattoir operators, supermarkets and other suppliers and buyers of meat products.
Rockdale Beef is a Japanese-owned, vertically integrated abattoir and feedlot business in Australia that operates a single co-located abattoir and feedlot located in Yanco, New South Wales. Its facilities are used only for beef products. Swift is a subsidiary of a Brazilian company and is also a vertically integrated operator of beef abattoir and feedlot facilities in Australia.
The ACCC carefully considered the competition effects of the proposed acquisition in a number of markets. In relation to the feedlot side of Rockdale's business, the ACCC examined the market for the acquisition of feeder cattle, while the acquisition of the abattoir side of Rockdale's business was examined in the context of the market for the acquisition of fat cattle, and the supply of processed beef.
"In making its decision, the ACCC considered that there will continue to be a number of competitors to Swift Australia Pty Ltd in both feedlots and abattoirs," Mr Samuel said.
The ACCC considered that if the merged entity attempted to depress cattle prices to below competitive levels and/or impose onerous service terms and conditions, existing competitors would be able to attract business and win market share away from the merged entity.
The basis upon which the ACCC reached its decision will be outlined in a Public Competition Assessment available in due course on the ACCC's website, www.accc.gov.au/publiccompetitionassessments.