ACCC to investigate Elders $475m Delta Ag takeover further

The national consumer watchdog has outlined preliminary concerns with Elders proposed acquisition of Delta Agribusiness.

Elders proposed $475m takeover of Delta Agribusiness is at risk, after the nation’s consumer watchdog flagged concerns the deal would substantially lessen competition in farming regions across Australia.

The Australian Competition and Consumer Commission published a statement of issues on Thursday, warning the proposed acquisition could reduce competition in the sale of rural goods locally and at a regional, state or national level.

“Competition in the supply of rural merchandise is critical to Australian farmers and our global competitiveness in agricultural products,” ACCC deputy chair Mick Keogh said.

“We have preliminary concerns that the proposed acquisition may lead to higher prices or reduced quality in the supply of rural merchandise without an independent Delta competing with Elders following this proposed acquisition.”

The ACCC’s preliminary view is that competition local markets in north-west Victoria, the Murray-Mallee in South Australia, the northern and central wheatbelt and Great Southern areas in Western Australia, would be substantially affected by the takeover.

Elders and Delta are the second and third biggest suppliers respectively of crop protection, farm supplies and chemicals in Australia, behind only Nutrien Ag. Elders operates 245 retail stores across the country, while Delta currently operates 64.

The ACCC statement comes days after Elders reported an improved half-year profit on the back of a rise in livestock prices and key acquisitions.

Farmer Andrew Weidemann. Picture: Supplied

Grain Producers Australia southern region director Andrew Weidemann said the proposed acquisition could result in issues over product supply and the price discovery mechanism.

“There were 33 sites we identified that would have essentially no competition if the sale went through,” he said.

“When you’ve got at least a couple of resellers in the area, you know there’s supply, but with less players in the industry there’s less products in the industry.”

“(The SOI) was in line with what we were saying, that they’d have to potentially divest assets because of the lack of competition.”

The ACCC has not reached a concluded view on any of the issues outlined and will investigate further, while Elders remains confident the transaction will bring benefits to local agricultural markets.

The ACCC is inviting submissions in response to the SOI by June 12, and anticipates making a final decision on the acquisition on August 21.