Acquirer: Burns Philp & Company Ltd; Target: Goodman Fielder Ltd

Summary

The proposed acquisition by Burns Philp Limited of Goodman Fielder Limited

Market definition

1. The national market for the manufacture and distribution of fresh and dry baker's yeast;
2. The State-based market for the manufacture and distribution of bread and baked foods.

Competition analysis

The Commission considers the proposed acquisition to raise issues of vertical integration as there is no product overlap in the operations of Burns Philp and Goodman Fielder. The Commission considered the competition effects of the proposed acquisition on the national fresh and dry yeast market and the State-based bread markets.

The Commission considered that the proposed acquistion was unlikely to lead to a substantial lessening of competition in the relevant markets for the following reasons:
(i) The high level of imports of dry yeast;
(ii) The competition provided by Bakels-Lesaffre, which has significant excess capacity and has gained a considerable market share since entering the yeast market in 1994, and has exercised consistent competitive constrain on Burns Philp in that market;
(iii) In respect of the State-based bread markets, the large number of bakeries capable of supplying bread would prohibit Burns Philp from raising the prices of Goodman Fielder's bread products.

Accordingly, the ACCC concluded that the proposed acquisition is unlikely to substantial lessening competition.

Merger type

Vertical

Guidelines thresholds

Unknown

Imports above 10%

Unknown

Initiation

Parties

ANZSIC code

2179