The Australian Competition and Consumer Commission (ACCC) says it will not oppose the proposed acquisition of Primo by JBS despite the concerns of some that it would reduce competition.
The ACCC says it received submissions from a range of interested parties, including farmers, competing abattoirs, and meat and small goods suppliers and customers, many of which expressed concern that the proposed acquisition would result in less competition in the market for the acquisition of fat cattle in northern NSW and Queensland.
“The ACCC undertook a detailed assessment and determined that Primo is currently not a strong competitive constraint on JBS. JBS’s abattoirs in Queensland and Primo’s abattoir at Scone are more than 500km apart,” 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.”
The ACCC has also said that it 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,” Sims said.
The ACCC says it also considered whether the proposed acquisition would have any competitive impact on meat customers, small goods customers or the provision of fat cattle service kills, but says it did not consider that “any significant competition concerns arose”.
JBS USA Holdings has ten processing plants in Australia and is listed on the Brazil stock exchange. JBS Australia processes beef, veal, lamb and mutton, and also processes pigs on behalf of a third party at its Devonport plant in Tasmania.
Primo is majority owned by Affinity Equity Partners, a private equity firm based in Singapore, and produces processed beef, pork and smallgoods under the Primo and Hans brands.
