GrainCorp Limited - proposed acquisition of Ridley Corporation Limited

Summary

GrainCorp Ltd proposes to acquire Ridley Corporation Ltd.

Market definition

For the purposes of this competition assessment, the key relevant markets were the state based markets for the production and supply of stockfeed in each of Queensland, New South Wales and Victoria. The markets for grain services (storing, handling and trading) and protein meal were also relevant to an examination of whether GrainCorp would be likely to have the ability and incentive to leverage its position in these markets into the stockfeed or flour milling markets.

Competition analysis

The proposed acquisition would increase the level of vertical integration of GrainCorp by adding Ridley's stockfeed business, which uses grain products as an input. The ACCC formed the view that the proposed acquisition was unlikely to substantially lessen competition in any of the relevant markets. In particular, the ACCC considered that GrainCorp would be unlikely to have the ability and incentive to leverage its position in grain related markets into stockfeed or flour milling markets, largely due to the presence of alternative suppliers. In addition, the ACCC considered that GrainCorp was unlikely to have the ability to discriminate against competitors given the difficulties GrainCorp would face in identifying with certainty the end-user of any parcel of grain.