Future of Murray Goulburn takeover in doubt

By Country News

Doubt has been cast on the future of the Saputo takeover of Murray Goulburn, with the Australian Competition and Consumer Commission voicing concerns about what it would mean for competition in Victoria’s west.

In a Statement of Issues paper released on Thursday, the ACCC said its concerns around the proposed acquisition were solely in relation to Murray Goulburn’s Koroit dairy plant in western Victoria.

Saputo, Murray Goulburn and Fonterra are the only major competitors in the region, with the ACCC voicing concerns that a Saputo takeover would see the company control more than two-thirds of raw milk processing capacity in the region and lead to lessened competition and lower prices for suppliers.

UDV president Adam Jenkins acknowledged that competition for raw milk was a concern for the UDV, but said ultimately whoever buys Murray Goulburn must be assured they will receive the value of the company back through profits.

‘‘We’re going to have to wait and see what Saputo will do now regarding the report and what that makes for their offer and the transaction,’’ Mr Jenkins said.

‘‘Does the ACCC cause some issues with the whole deal as it may be not going ahead as we first thought?

‘‘We’ve just got to sit down and work out the best way forward.’’

In a statement Murray Goulburn said it was not a final decision on the asset sale but did provide the ACCC’s preliminary views.

‘‘The successful completion of the asset sale remains MG’s primary focus and MG will continue to work closely with Saputo and the ACCC to be able to achieve completion,’’ the statement said.

The ACCC invites further submissions from interested parties in response to the Statement of Issues by March 13. The ACCC’s final decision is due on 29 March.