A PYMNTS Company

Australia: Regulator concerned Saputo-Lion deal could hurt farmgate milk price

By  |  August 8, 2019

The Australian competition regulator is worried about less farmgate milk price competition if Canada’s Saputo takes over the cheese processing operations of its Tasmanian competitor, Lion Dairy and Drinks.

Questions are also being asked about how Saputo’s AU$280 million (US$190.6 million) acquisition may impact cheese market supplies and price competition in Australia. 

The Australian Competition and Consumer Commission (ACCC) estimated at least 80% of the Tasmanian milk market would be controlled by Saputo or Fonterra if Saputo’s buyout goes ahead. 

Saputo, which already owns the former Murray Goulburn milk processing plant at Smithton, is poised to buy Lion’s cheese processing plants at Burnie and King Island.

“We are concerned combining these two operators may lead to Tasmanian dairy farmers being paid lower prices for their raw milk” said Mick Keogh, ACCC Commissioner.

Full Content: Farm Weekly

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.