Lactalis’ bid for Fonterra’s dairy assets sparks ACCC review

AUSTRALIA – Lactalis, a French multinational dairy company, has received an under consideration notice from the Australian Competition and Consumer Commission (ACCC) to acquire Fonterra’s up-for-sale consumer-facing dairy assets.

The Australian Competition and Consumer Commission (ACCC) issued the notice relating to the proposal, inviting feedback on the proposal from interested parties, stating in a statement that Lactalis proposes to acquire Fonterra’s global consumer business and the cooperative’s dairy and ingredients foodservice businesses in Australia.

According to the ACCC, Lactalis has around 500 milk suppliers across New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia. It processes milk into cheeses, spreads and yogurts, and also processes dairy ingredients such as milk powders.

The ACCC added that Lactalis and Fonterra overlap in various parts of the dairy supply chain, hence the request for comments by 16 May.

Those areas were listed as the purchase of raw milk, mainly in Victoria and Tasmania. And processing into finished dairy products like cheese, spreads and yogurts, as well as ingredients such as milk fats, whey powders and lactose.

There could also be conflict in the supply of dairy products and ingredients to retailers and foodservice customers, the ACCC suggested.

Fonterra first announced an exit plan from its consumer-facing division in May last year, when it said the business would explore a full or partial disposal of the assets.

Then in November, Fonterra said it would move ahead with the proposal, throwing a possible IPO of the consumer operations into the option pool as the co-op instead plans to focus on the dairy ingredients and foodservice parts of the business.

Lactalis initially responded by saying, “As the world’s leading dairy group, Lactalis is looking at all the opportunities that present themselves,” confirming with Just Food via a spokesperson that the dairy major currently has “no activities in New Zealand, Oceania or Sri Lanka.”

Lactalis then issued a follow-on statement, acknowledging it was in response to the ACCC’s filing.

“As the leading dairy group, global development is core to our growth plans, and we are naturally considering investments in Australia and internationally,” Lactalis added.

“We would envisage many interested parties would participate in the sale process. Several pre-emptive steps are standard ahead of any agreement being considered, and Lactalis have not signed an agreement.”

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