NSW Nationals Senator John Williams is seething at the Australian Competition and Consumer Commission’s (ACCC) decision to not oppose the takeover of the Primo Group by JBS Australia.
Nanjing Night Net

In a strongly worded statement today, Senator Williams accused the ACCC of being out of touch with market reality.

The decision is likely to cause headaches for the Nationals and Coalition government facing under increasing pressure to implement reforms that will alleviate pressures on livestock producers from constricted supply chain competition.

Senator Williams said the ACCC’s decision to not oppose the proposed $1.45 billion acquisition of Primo was “very disappointing in my opinion”.

He said as part of the review process, he lodged submissions on behalf of concerned people in the livestock industry and their “common worry” was that the takeover would lessen competition at the saleyards.

Read more: ACCC green lights JBS takeover

Senator Williams said the ACCC agreed there was “some lessening” of competition – but then claims “it is not a substantial lessening”.

He said the ACCC also claimed Primo wasn’t a strong competitive restraint on JBS and tried to justify the distance of more than 500 kilometres between Primo’s Scone abattoir and JBS’s Queensland abattoirs to support its case.

“This is out of touch with reality because cattle can and are transported many hundreds, even thousands of kilometres,” he said.

“I find it confusing that on one hand the ACCC will not oppose this acquisition, yet in the next breath says it is wary of the potential impact of the further consolidation of abattoirs.

“If that is true, why didn’t it act in this instance?

“From talking with farmers and those in the livestock selling industry I know this decision will be met with dismay and only time will tell whether it is right.”

Keeping an eye on future bidsThe ACCC received submissions from “a range of interested parties”, who expressed concern that the proposed acquisition would result in less competition in the fat cattle market in northern NSW and Queensland.

Farmers and meat retailers are increasingly frustrated by consolidation of meat processing activities which are limiting the choice of independent meatworks bidding for livestock or offering service kill options to producers or butchers.

“The ACCC undertook a detailed assessment and determined that Primo is currently not a strong competitive constraint on JBS,” ACCC chairman Rod Sims said.

“Furthermore, the increase in market share as a result of the proposed acquisition would be relatively small and JBS would continue to be constrained in the market for the acquisition of fat cattle by a number of alternative abattoirs and supermarket chains, in the northern NSW and southern Queensland region.”

While the ACCC determined that, in this instance, the proposed acquisition would be unlikely to raise significant competition concerns, the watchdog is wary of the potential impact of further consolidation of abattoirs.

“The ACCC will continue to monitor this industry and any future acquisitions will face additional scrutiny,” Mr Sims said.

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