The Australian Competition and Consumer Commission has flagged concerns about the proposed acquisition of Murray Goulburn’s (ASX:MGC) Koroit dairy plant in Victoria.
They are worried about Saputo purchase will impact competition for farmers’ milk in the area.
Saputo’s Allansford plant and Murray Goulburn’s Koroit plant would have over two thirds of the raw milk processing capacity in south-west Victoria and south-east South Australia. The two plants currently produce the majority of raw milk in the area.
Fonterra is the only other major competitor with a processing plant in the region.
The ACCC’s is also concerned Saputo and Fonterra would be more likely to drop their prices if Saputo acquired Koroit – with limited alternatives for farmers.
Shares in Murray Goulburn (ASX:MGC) are trading 3.6 per cent lower to $0.82.