The ACCC said in a statement that it found Nestlé’s proposed acquisition of the Peters brand in western Australia and Connoisseur brand Australia-wide was “unlikely to substantially lessen competition in the relevant markets”.
The ACCC noted that the merged entity would be constrained from predatory pricing by effective existing competitors.
It noted freezer space in supermarkets was dominated by a limited number of existing manufacturers, but Fonterra was effectively transferring its position there to Nestlé, which did not have a significant share of its own in freezers.
Nestlé will integrate the production of Fonterra’s Peters business and Connoisseur brands in its national ice cream business from 29 June, with all manufacturing consolidated in its Mulgrave facility in Victoria.
Eventually, up to 140 jobs will be lost from Fonterra’s Balcatta site in western Australia.
Fonterra has decided its primary focus across Australia was its categories of cheese, spreads, yogurts and dairy desserts.
Peters and Brownes bought Tip Top in April 1997 and created the largest independent ice cream business in the Southern Hemisphere, with combined sales of $550m. And in June 2001, Fonterra bought the Peters and Brownes foods business off Heinz Watties, acquiring the Tip Top brand as well. But outside western Australia, the Peters brand is already owned by Societé de Produits Nestlé SA.
Fonterra is selling the remainder of its Australian ice cream interests to Bulla, including the licence to manufacture and market the Cadbury ice cream range in Australia, as well as the Brownes tub ice cream and Authentic Ice Cream brands.
The ACCC is due to announce it decision on the competitive impact of the Bulla proposal on 8 July.
Fonterra has said its Tip Top ice cream operation in New Zealand and its remaining west Australian dairy business will not be affected by the deals.
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