Mega-milk deal sparks ACCC concern for farmers

The Australian Competition and Consumer Commission has expressed concerns about the proposed purchase of the nation’s biggest milk processor Murray Goulburn by Canadian dairy giant Saputo, saying the deal could lead to lower prices for farmers.
In a statement released on Thursday, the ACCC said it was concerned that the deal would leave just two major competitors with processing plants in Victoria’s south west, Saputo and Fonterra.
That situation meant the processors would be more likely to offer lower prices to farmers as many dairy farmers would have “limited alternatives,” the ACCC warned.
“We are concerned this transaction would ultimately lead to lower prices being paid to dairy farmers in the region,” ACCC chairman Rod Sims said.
“When Murray Goulburn dropped its prices in 2015–16, Fonterra was quick to follow. Our analysis has shown that many farmers switched to Saputo in response, the only other major processor nearby.” Sydney Morning Herald – Read more…