December 7, 2021


Australia's competition commission will not oppose JBS' acquisition of pork processor

 

 

JBS Australia's proposed A$175 million (US$124 million) acquisition of pork processor Rivalea Holdings will not be opposed by the Australian Competition and Consumer Commission (ACCC).


After a review, ACCC determined the transaction is unlikely to lessen competition substantially in the pork production and processing markets.


Concerns about increased vertical integration were previously expressed, but JBS and Rivalea do not compete closely, according to a release from ACCC.


JBS is Australia's largest meat and food processing company, processes and supplies fresh pork, value-added pork products and small goods such as ham and bacon to wholesalers and retailers in Australia, including through its subsidiary Primo. The company operates one pig abattoir and processing facility in South Australia.


Meanwhile, Rivalea processes about a quarter of Australia's hogs and is the majority owner of the Diamond Valley Pork abattoir and processing facility in Laverton Victoria, and another abattoir and processing facility in Corowa New South Wales, the article said. Rivalea also grows live pigs and supplies fresh pork and value-added pork products to wholesalers and retailers in Australia.


"Although Diamond Valley Pork is a very important asset in the supply chain, we consider that a strategy to foreclose or frustrate access to service kill customers is unlikely as it would create significant commercial risks for JBS, including a loss of throughput and profit at Diamond Valley Pork," ACCC deputy chair Mick Keogh said in the release.


It's also unlikely that JBS will have the incentive to foreclose or frustrate access to fresh domestic pork for its wholesale and small goods competitors, ACCC added.


"Fresh pork can be transported significant distances, so there are alternative places where wholesalers can acquire fresh pork if JBS refuses supply," Keogh said in the release.


ACCC said it will closely watch trading behavior in the pork industry and will not hesitate to take enforcement action if there is any conduct that breaches the competition or fair trading provisions of the Competition and Consumer Act.


The deal continues to await approval from Australia's Foreign Investment Review Board.


- Farm Journal's PORK