The Australian Competition and Consumer Commission (ACCC) has commenced market inquiries about a proposed section 87B undertaking from Baiada Poultry, which seeks to address competition concerns previously identified by the ACCC.

On 11 February 2009, the ACCC announced its decision to oppose the proposed acquisition of Bartter by Baiada. The ACCC believed that the proposed acquisition would be likely to have the effect of substantially lessening competition in markets for the wholesale supply of processed chicken, in contravention of section 50 of the Trade Practices Act 1974.

To address the ACCC's competition concerns, Baiada has now offered a proposed undertaking under section 87B of the Act.

Under the proposed undertaking, Baiada, upon acquiring Bartter, will simultaneously divest all assets currently owned by Bartter in Victoria to La Ionica Poultry.

The assets to be divested include Bartter's Geelong processing plant, associated breeding farms and hatcheries and Bartter's North Melbourne feed mill. If accepted by the ACCC, the proposed undertaking commits Baiada to the divestiture of certain assets as a condition of the proposed acquisition.

La Ionica currently operates a chicken processing facility in Thomastown, Victoria, and is a major supplier of whole dressed birds to customers, predominantly in Victoria and to a lesser extent in New South Wales.

The ACCC is now seeking views from market participants to assist its consideration of the proposed undertaking and determine whether the proposed divestiture would be likely to alleviate the ACCC's competition concerns.

The proposed undertaking will be available on the ACCC web site (click here). Submissions are due by 24 April 2009.

Further Reading

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