The commission says it has some “preliminary” concerns about the acquisition, which will see JBS — Australia’s largest meat and food processor — increase its presence in pig farming, export-accredited pig abattoirs and smallgoods.
Deputy chair Mick Keogh said the ACCC’s preliminary view was that while JBS and Rivalea did not compete closely, the proposed acquisition could give rise to vertical integration concerns.
Rivalea’s Diamond Valley Pork abattoir at Laverton currently provides service kills to third parties. The ACCC is concerned that post-acquisition, JBS may have the incentive, particularly due to ownership of its Primo smallgoods brand, to frustrate service kills at that abattoir by increasing prices, offering less favourable terms or foreclosing access.
Mr Keogh said the ACCC was also concerned that JBS may increase the price of fresh pork or reduce supply to competing smallgoods producers and pork wholesalers.
“Our concern is not limited to JBS potentially denying access to processing facilities, it’s also about the price and terms on which access would be provided,” he said
The ACCC is also considering whether rival smallgoods producers and wholesalers’ reduced access to fresh pork or increased costs may also impact retail supply.
Rivalea is a subsidiary of Singapore-listed food company QAF Ltd, and is a vertically integrated pork production company with operations in both Victoria and NSW.
Its commercial activities include feedstock production, pig production, service kills, processing (boning and value-adding services) and the distribution of fresh and value-added pork products to wholesalers and retailers in Australia.
The ACCC has published a statement of issues and is seeking further information from interested parties by September 30.
