Australian Dairy Farmers urge ACCC to block Coles/Saputo deal

The nation’s dairy farmer lobby says the ACCC needs to block Coles from buying two Saputo processing plants.

Australia’s competition watchdog needs to bite back at plans by Coles to acquire Saputo’s milk processing plants, the nation’s dairy farmer leader says.

Australian Dairy Farmers president Rick Gladigau has made an eleventh-hour plea to the Australian Competition and Consumer Commission to oppose the $105 million deal, with a decision set to be handed down next week.

He says the proposed supermarket takeover of the Sydney and Melbourne bottling plants will reduce competition in the dairy supply chain.

“The deal will not improve transparency, bargaining power imbalances, information sharing, or

competition,” Mr Gladigau said.

“Not for farmers, processors, other milk brands, or consumers.

ADF president Rick Gladigau.

“If the ACCC does approve the Coles acquisition of Saputo sites, ADF calls on the ACCC to ensure that Coles and Saputo provide enforceable undertakings to protect dairy farmers.”

In April, Coles announced to the Australian Securities Exchange that it would buy the Melbourne processing site at Laverton as well as its Sydney equivalent at Erskine Park.

Following the first stage of the review, the ACCC outlined concerns that a Coles acquisition would trigger a major structural shift in the dairy sector.

Mr Gladigau said the mooted Coles-Saputo deal highlighted the need for the voluntary Food and Grocery Code to be made mandatory for retailers and wholesalers.

“When one of the big two retailers is endeavouring to become more powerful in the supply chain, and processors are calling to review and water down the Dairy Code of Conduct, it is time for the ACCC and government to ensure we protect farmers,” he said.

New Coles chief Leah Weckert at Coles Tooronga store. Picture: Nicki Connolly

In July, Coles chief executive Leah Weckert said the supermarket was confident any outstanding concerns could be addressed.

“From Coles’ perspective, we see no lessening of competition in any relevant market,” Ms Weckert said.

“(We note) that Coles already acquires approximately 80 per cent of the volumes at the facilities and will provide milk processing services to Saputo Dairy Australia under a tolling arrangement.”