The Australian Competition and Consumer Commission will not intervene in the proposed merger of Bonlac Foods Limited and the New Zealand Dairy Board, ACCC Chairman, Professor Allan Fels, said today.
Under the proposal NZDB will merge its Australian dairy ingredients business into Bonlac, and Bonlac and NZDB will each hold 50% of the shares in a joint venture company that will market and sell their processed dairy products to wholesalers and retailers. NZDB will also acquire shares in the capital of Bonlac entitling it to 25% in voting power and interest.
The ACCC sought comments from a range of market participants including retailers, wholesalers, major ingredients customers and manufacturers of competing products, regarding the likely competition effects of the acquisition.
The major overlap between the activities of the merger parties occurred in the markets for cheese, dairy spreads and margarine, and the sale of various dairy ingredients such as milk powders and lactose.
The ACCC found that the merged entity would continue to face competition from a number of other manufacturers such as Unilever, Murray Goulburn, Tatura and Dairy Farmers.
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 by the merged entity.