The ACCC will not oppose the acquisition of animal feed supplement supplier, XF Australia Limited by Graincorp Limited (ASX: GNC).

GrainCorp and XF Australia both supply molasses-based liquid animal feed supplements across the east coast of Australia.

GrainCorp acquires molasses as an input for its feed supplements from sugar mills and on-sells surplus amounts to other distributors, competing producers of animal feed supplements and farmers directly. XF Australia acquires molasses from sugar mills to produce its supplements but does not resell molasses to third parties.

Animal feed supplements are important to farmers in helping them feed their cattle, particularly during periods when pasture supply and quality is low, and animals require additional nutrients. Molasses is a valuable source of energy and can be a useful input for animal feed supplements.

The ACCC’s review focused on the closeness of competition between GrainCorp and XF Australia. This included whether the removal of XF Australia as a result of the proposed acquisition would substantially lessen competition in the supply of animal feed supplements in regional markets across the east coast of Australia.

Another focus of the review was whether the acquisition would provide GrainCorp with the ability or incentive to restrict sale of molasses to other third-party distributors and competing producers of animal feed supplements.

“After carefully examining the molasses supply arrangements between GrainCorp, XF Australia, other animal feed supplement suppliers and sugar mills, we concluded there would be no substantial lessening of competition,” ACCC Commissioner Stephen Ridgeway said.

The ACCC consulted with a wide range of market participants, including feedlot owners and graziers, competitors as well as third party distributors of molasses and sugar mills.

“We have listened to the concerns expressed by some businesses about shortages of molasses supplies from to time to time, particularly during times of severe drought. We have been very careful in examining this proposed acquisition to ensure that it does not exacerbate these existing challenges in a way that breaches our merger laws,” Mr Ridgeway said.

The ACCC concluded that GrainCorp will still face significant competition from other animal feed supplement suppliers such as Bundaberg Molasses and Riverina.

The ACCC also considered that the proposed acquisition would not create the ability, or incentive, for the combined entity to reduce molasses supplies to downstream players.

“We concluded that competing animal feed supplement suppliers will still be able to obtain molasses supply directly from sugar mills, distributors and other resellers,” Mr Ridgeway said.

More information can be found on the ACCC’s website at GrainCorp Limited – XF Australia Limited.


GrainCorp (ASX: GNC) is an Australian agribusiness and processing company that supplies liquid animal feed supplements and re-supplies molasses and grain to competing suppliers of animal feed supplements.

Through its GrainCorp Feeds Australia (GFA) division, GrainCorp supplies molasses-based liquid animal feed supplements for customers in the feedlot, pasture and feed mill sectors, under brands such as Molafos and Rumifeed, and a vegetable-oil based supplement for beef cattle under the brand Energro.

GrainCorp has two animal feed supplement facilities in Queensland and a toll processing agreement in Victoria.

XF Australia is an animal feed supplement and nutritional consulting business. XF Australia supplies liquid and loose lick animal feed supplement products specifically for beef and dairy cattle and sheep through its subsidiary Performance Feeds to customers in Australia’s feedlot and grazing sectors. Performance Feeds also distributes products under brands such as Anipro, FibrePro and WeatherPro.

Performance Feeds supplies animal feed supplement products out of three facilities in Queensland and one in Victoria.

Animal feed supplements are products designed to provide additional nutrients to the diet of animals. The goals of supplement can differ depending on the type of farming and pasture quality. In drought conditions where pasture quality is low, animal feed supplements can be important as animals are able to obtain less nutrients from their pasture.