AUSTRALIA – Canadian dairy major Saputo has successfully sold two fresh milk processing facilities to Coles Group Limited, an Australian-based supermarket, retail, and consumer services chain.
The transaction, valued at approximately US$70.2 million, involved selling facilities in Laverton North, Victoria, and Erskine Park, New South Wales.
The completion of this transaction aligns with Saputo’s network optimization strategy, a key component of its Global Strategic Plan.
“This sale reinforces our roadmap for long-term success in Australia and demonstrates our agility in further adapting our manufacturing footprint to focus on higher-value growth opportunities,” said Lino A. Saputo, Chair of the Board, President, and CEO.
In addition, he noted that despite the sale, Saputo will retain its valued farmer relationships in Australia and continue processing fresh milk products at the two facilities.
Additionally, the employment of approximately 48 staff members at these sites has been transferred to Coles Group Limited.
The sale had previously been postponed by the Australian Competition and Consumer Commission (ACCC), which sought feedback from concerned parties about the deal.
Coles, Australia’s second-largest supermarket chain, announced its intention to purchase the milk processing plants in April 2023.
The ACCC began reviewing the acquisition in May and published preliminary findings in July. It invited responses until August 3, 2023.
By the scheduled decision date of September 14, the ACCC had not concluded, as it was still awaiting crucial information from the involved parties and had yet to set a new submission deadline.
Feedback received in July indicated that the acquisition could significantly alter the structure of Australia’s dairy sector.
The feedback from various stakeholders in July indicated that the acquisition could result in a significant structural change within Australia’s dairy sector.
If approved, this transaction would mark the first instance of a supermarket owning and operating its milk processing facilities, according to the regulator.
In addition, concerns have been raised about how this acquisition may alter Saputo’s incentives to continue acquiring raw milk in New South Wales. Such a shift could potentially reduce competition in specific regions of the state, ultimately impacting raw milk prices for farmers.
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