Landmark/Ruralco merger raises concerns from primary producers

A lack of competition at saleyards and lesser rural services are some of the concerns raised from the potential Landmark/Ruralco merger.

• Farmers on the hunt for feed
• Massive drop in sheep flock

Livestock SA has raised concerns about the proposed takeover of Ruralco by Landmark, saying primary producers are worried about lesser competition in the rural services sector.

In February, rural services firm Ruralco received a $469 million takeover offer from Nutrien Ltd, which operates in Australia through Landmark, one of the largest agricultural businesses in the nation.

The Australian Competition and Consumer Commission is looking into the merger and has raised concerns the proposed takeover could reduce wholesale competition, as well as lead to discrimination against some independent retail stores.

Livestock SA raised a raft of concerns in its submission to the ACCC, including potentially less employment in regional areas, as well as lower rates of sponsorship of local events.

President Joe Keynes said there was potentially less competition in a range of areas, from livestock sales to retail outlets.

“The Landmark acquisition of Ruralco will lead to a reduction in competition at saleyards, affecting competition in not only cattle and beef sales but also sheep and other livestock,” he said.

“With less bidders, prices will in most instances be lower.”

A number of livestock agencies are part of Ruralco including Southern Australian Livestock, Rodwells and Platinum Ag Services, all regular bidders at SA saleyards.

Mr Keynes said another concern was product availability for everything from animal health to fertilisers.

“A major concern for producers is that the acquisition will result in less retail outlets and a likelihood of a reduction in the number of products available,” he said.

“While there may be cheaper prices, it is this availability of products that is of most concern.

“Producers find that no one product is entirely effective in all instances and having a wide range of products is essential to cover all circumstances.”

Mr Keynes said another concern was a potential reduction in the range of product quantities.

“A certain product may only be available to purchase in bulk when all that is required is a small quantity,” he said.

“If these products have short use-by dates, it may not be cost effective to buy in bulk quantities, and this can lead to difficulties for producers when there is no alternate supplier.”

Ruralco owns CRT, Australia’s largest independent group of rural retailers.

“In South Australia, CRT is the second largest supplier of rural products and after the merger Landmark will have a much higher proportion of the trade,” Mr Keynes said.

“From a local community perspective, where there have been both Landmark and Ruralco businesses in a town, there will be rationalisations and decisions on which will close, and this will have implications affecting not only clients but local communities.

“CRT has a reputation of being good sponsors of local sporting clubs and activities and losing this may even place clubs and activities in jeopardy of not being able to continue.”

Landmark operations managing director Rob Clayton said the combined businesses would further strengthen the service and innovation that Landmark delivered to Australian growers.

“With an outstanding team across Australia and access to Nutrien’s expertise, we will provide enhanced solutions and greater value to help Australian growers in an increasingly competitive global market,” he said.