The ACCC authority has given the green light for a major takeover in the Australian potato industry. As a result, the potato branch of meat processor Thomas Foods International will come into the hands of the Mitolo Group.
The Mitolo family business is the largest potato wholesaler in Australia. The company is located in the south of the country, where approximately 80% of Australia's potato acreage can be found. In June Mitolo announced the take over of Thomas Foods' potato activities. The company wants to further increase its capacity for packaging and sorting fresh products. Until now, Mitolo had 2 factories with a daily processing capacity of 500 tons.
Sufficient sales opportunities
The ACCC sees no reason to stop the takeover. According to the Competition Authority, most potato growers in Australia have sufficient choice when it comes to selling their product. The same applies to retailers who purchase potatoes. Growers fear that Mitolo will reduce payment prices. In that case, growers have the option to switch to other buyers, the ACCC concludes. According to the authority, growers could also switch to the cultivation of chip varieties.
The declining consumption of potatoes in Australia is also not a reason for the ACCC to stop the takeover. This development would affect growers equally, regardless of the merger of Mitolo and Thomas Foods. The deal between the two companies includes potato varieties that are still owned by Thomas Foods. According to the authority, there is no competitive sensitivity there either. Growers and packers continue to have access to sufficient other varieties so that they can continue to compete with Mitolo.
With this conclusion from the ACC, nothing stands in the way of the takeover. The deal between Mitolo and Thomas Foods would take effect on July 1, 2020.