ACCC urged to block Elders’ $475m takeover of rival

A leading farmer lobby has called for the competition watchdog to stop a proposed deal for Elders to acquire Delta Agribusiness.

An Australian agribusiness giant’s planned $475m takeover of a rival rural products provider remains under the watch of the ACCC, as a leading farmer lobby calls for the merger to be blocked.

The nation’s competition watchdog has delayed announcing its findings into their review of ASX-listed Elders’ proposed agreement to acquire 100 per cent of the shares in Delta Agribusiness.

The ACCC was due to hand down its findings on the proposed merger on March 13, but earlier this month requested further information from the merger parties. They are yet to announce a revised provisional decision date.

Cropping lobby group Grain Producers Australia expressed concern about the move last year, submitting to the ACCC review, its members were worried about a “creeping tide of consolidation”, in Australia’s rural supply markets.

“This has occurred progressively over the last 5-10 years through a series of creeping or serial mergers and acquisitions involving wholesale, retail and vertically integrated rural supply businesses,” GPA Southern Director Andrew Weidemann said.

“This market evolution has progressively led to a substantial lessening of competition in these critical markets to the detriment of farmers and the wider Australian public.

“GPA is concerned that Elders Limited’s proposed takeover of Delta Agribusiness will substantially lessen competition in localised retail markets for rural supplies and the Australian wholesale supply market for key cropping inputs such as crop protection chemicals, fertilisers and seed.”

Grain Producers Australia Southern Director Andrew Weidemann.

GPA also said in a statement, their submission – which remains confidential – provided evidence for the ACCC to consider, showing 30 different locations where Elders and Delta currently have directly competing retail premises, by postcode.

“Elders proposed takeover would also substantially reduce wholesale supply options for independent retailers in Australia, most evidently in Western Australia,” the GPA ACCC review submission said.

“This has the potential to further hamper the ability of independent stores to effectively compete with the expanding Elders and Nutrien duopoly.

Elders managing director Mark Allison. Picture: Adam Taylor

“The ACCC has previously identified the important role independent stores and small chains play in ensuring competitive tension in Australia’s rural supplies markets – Elders proposed takeover of Delta would have major detrimental impacts on these important players in this market.”

In the last financial year, Delta Agribusiness recorded revenue of $835m and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $53m, supported its 68 branches and 40 independent wholesale customers spread throughout Victoria, NSW, southern Queensland, South Australia and Western Australia.

“Delta provides us with greater exposure to key local retail markets as well as a leading agronomy and farm advisory team to complement and extend our products and services range for rural and regional Australians,” Elders managing director Mark Allison said when announcing the proposed merger in November last year.