ACCC approves Elders’ takeover of rural supplies wholesaler AIRR

The Australian Competition and Consumer Commission will not stop the Elders takeover of Australian Indpendent Rural Retailers from going ahead.

ACCC deputy chairman Mick Keogh.

ELDERS’ takeover of Australian Independent Rural Retailers has moved a step closer, with the Australian Competition and Consumer Commission ruling that it has no objection to the deal.

Elders announced in July it would pay $157 million to buy rural supplies wholesaler AIRR.

The deal did not include any of the independent retail outlets in the AIRR network.

ACCC deputy chairman Mick Keogh said Elders was an important retailer of agricultural supplies but had minimal operations in wholesaling, while the reverse applied to AIRR.

“The ACCC examined the proposed transaction closely, because it could give rise to vertical integration concerns,” Mr Keogh said.

“In particular, the ACCC assessed the risk that independent stores would be discriminated against by Elders in a way that harms competition.

“We tested these vertical issues closely with industry participants and independent retailers.

“Market feedback suggested that most independent retailers consider they have sufficient alternative supply options if Elders attempted to discriminate against them.”

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Mr Keogh said existing or potential new buying groups or wholesalers could expand in response to any future change in AIRR’s offering.

He said ACCC also considered whether the deal would result in reduced competition in towns where both Elders and AIRR stores operated.

“The vast majority of locations impacted have other stores competing with Elders and the AIRR-supplied stores, which are likely to prevent a softening of competition,” he said.

“In those cases where there were limited alternatives to the Elders and independent AIRR-supplied store, market feedback indicated that there were alternative wholesale supply options for the relevant independent store.”

The takeover now has to be approved by AIRR shareholders and the courts.