Acquirer: Brismark (Qld Chamber of Fruit & Vegetable Industries Co-op), Landacq Ltd; Target: Rocklea Markets (Brisbane Markets), Brisbane Markets

Summary

Queensland Government proposes to sell the Brisbane Markets via bidding process. The Government has sought assurances from bidding parties that there are no competition issues arising.

Brismark, representing wholesalers, is a potential acquirer of the Brisbane Markets.

Market definition

Relevant market was considered to be the wholesale of fresh fruit and vegetables in Queensland.

Competition analysis

The Brisbane Markets account for approximately 50% of the fresh fruit and vegetables distributed in Queensland. Brismark submitted the most significant threat to the operation of the Brisbane Markets is the establishment of off-market warehousing and distribution facilities, either by existing wholesalers or the major retail chains. While the major chains continue to source significant volumes of product from market wholesalers, off-market distribution centres have already been established in some areas and the levels of supplies direct from growers has increased in recent years. Brismark further submitted that wholesalers located within the Markets compete vigorously (and will continue to do so) with each other, but also with off-market distribution networks.

As to the interaction between the wholesalers and other lessees of the Brisbane Markets, as well as other operators at different levels of the supply chain, there is some potential for Brismark to favour particular growers or retailers. By locking out competitors at these levels or restricting their access to the fresh fruit and vegetables distributed through the Brisbane Markets Brismark may be in a position to limit competition at other levels of the supply chain. However, as the Brisbane Markets account for only 50% of fresh produce distribution and alternative methods of distribution exists, this is unlikely to raise significant concerns. Alternatively, any conduct by Brismark that limits the opportunities for other businesses at the production and retail levels is likely to be subject to scrutiny under other provisions of the Trade Practices Act.

Furthermore, the acquisition of the Brisbane Markets by Brismark is effectively a transfer of any market power from the current owner, Brisbane Markets Corproation, to Brismark. Therefore, the straight transfer is unlikely to amount to a substantial lessening of competition.

Merger type

Asset Sale

Guidelines thresholds

Unknown

Imports above 10%

N/A

Initiation

Parties

ANZSIC code

4519