Canadian dairy giant Saputo should not have to sell off Murray Goulburn’s (MG) Koroit plant if it acquires all of cooperative, according to the Wannon branch of the United Dairyfarmers of Victoria.(UDV).
Branch spokesman and Koroit dairy farmer Bernie Free said the branch believed that if Saputo was allowed to keep the Koroit plant after it bought it, it would would compete more for milk in western Victoria.
Mr Free said the Warrnambool Cheese and Butter plant at Allansford, which was owned by Saputo, was full to capacity and Saputo was unlikely to compete more for milk in western Victoria if it was not allowed to keep the below-capacity Koroit plant.
The Australian Consumer and Competition Commission (ACCC) has told Saputo it has concerns there would be less competition for milk in western Victoria and south-eastern South Australia if Saputo kept the Koroit plant as part of its planned acquisition of MG.
The ACCC has said that if Saputo keeps the Koroit plant, there would only be Saputo and Fonterra competing for milk in the region, which could lead to a lower farmgate milk price paid to farmers.
Saputo has responded that it will sell off the Koiroit plant to a third party in order to get the ACCC’s approval for its acquisition of the rest of the struggling MG.
Mr Free said the ACCC’s concern that there would not be enough competition for milk if Saputo and Fonterra were the only two major regional dairy processors ignored the reality that processors did not draw just from the region’s milk but also from a ‘southern milk pool.’
“The actual competition for milk is for the whole of the southern milk pool, not region by region,” Mr Free said.
He put his concerns last week to the ACCC about its stance after Saputo made a presentation to MG suppliers in Heywood last Wednesday.
The ACCC is due to hand down its final decision on Saputo’s proposal to buy MG on Thursday, March 29.
MG’s supplier shareholders are to meet next week on April 5 at a meeting in Melbourne to vote on whether they will accept Saputo’s offer to buy MG.
Apart from the approval of the ACCC and supplier shareholders, Saputo’s bid also needs clearance from the Foreign Investment Review Board.
By: Everard Himmelreich
Source: The Standard