Primo buyout not to be opposed by ACCC

The Australian Competition and Consumer Commission will not oppose JBS USA Holdings Inc’s (JBS’s) proposed acquisition of Australian Consolidated Food Holdings Pty Limited (Primo).

The ACCC received submissions from a range of interested parties, including farmers, competing abattoirs, as well as meat and smallgoods suppliers and customers. Many industry participants 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 will continue to monitor this industry and any future acquisitions will face additional scrutiny,” Mr Sims said.

The ACCC also considered whether the proposed acquisition would have any competitive impact on meat customers, smallgoods customers or the provision of fat cattle service kills, but did not consider that any significant competition concerns arose.

JBS USA Holdings Inc is a meat processor listed on the Brazil stock exchange with 10 processing plants in Australia, including beef processing capacity in Dinmore and Toowoomba in southern Queensland.

Primo’s key smallgoods brands are Primo and Hans. Primo is majority owned by Affinity Equity Partners (a private equity firm based in Singapore) and produces processed beef, pork and smallgoods. Primo operates a beef processing plant at Scone, NSW, a pork processing plant at Port Wakefield, South Australia, and manufacturing facilities at Chullora, NSW, and Wacol, Queensland.

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