China cleared to takeover Aussie brands like Dairy Farmers and Pura

Lion's dairy and drinks business includes big-name Australian brands like Dairy Farmers, Big M, Pura, Daily Juice and Berri. Source: Getty.

The Australian Competition and Consumer Commission (ACCC) says it will not oppose the proposed $600 million deal that would see China Mengniu Dairy acquire Lion’s dairy and drinks business, which includes big-name Australian brands like Dairy Farmers, Big M, Pura, Daily Juice and Berri. Mengniu also owns Australian dairy processor and exporter Burra Foods, and infant formula company Bellamy’s Organic.

The competition watchdog reviewed the deal amid concerns the proposed acquisition would have an impact on competition for the purchase of raw milk from dairy farmers in the Gippsland region.

“While Burra and Lion D&D compete for the acquisition of raw milk, they are not close competitors, and our investigations concluded that dairy farmers are unlikely to switch between the two,” ACCC Deputy Chair Mick Keogh said.

“The level of aggregation from the proposed acquisition will be relatively low, with Burra and Lion D&D combined acquiring less than 25 per cent of raw milk in Gippsland. Two other large raw milk buyers remain in the Gippsland region, Saputo and Fonterra, as well as some smaller processors.”

The ACCC also found that there was considerable spare processing capacity at other raw milk processors in the Gippsland region, giving farmers alternative potential buyers for their milk. The proposed deal still needs approval from the Foreign Investment Review Board.

According to the Brisbane Times, a spokesperson for Lion’s dairy and drinks business said they welcomed the decision. “We note that the ACCC has today announced it will not oppose the proposed acquisition,” she said. “We welcome this outcome, which is an important step forward, and look forward to moving through the remaining regulatory approvals and completing the sale in the coming period.”

Mengniu Dairy’s Lion bid was announced in November, however, it didn’t take long before the proposed deal was met with controversy, with Alan Jones leading the way. The radio host questioned whether the farmers were getting enough support.

Is that part of the agenda, by the way, that the farmers go broke and let the Chinese come in and buy the farms? Is that part of the agenda? Must be, must be” he said on 2GB at the time, according to The Daily Telegraph.

“No one has put five bob out to save a farmer we underwrite the banks, we underwrite the students. Do we want rural Australia to die or have China move in? They own the avocado farms, they own the water, half of the minerals, all the solar, all the wind farms, perhaps that’s it.”

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