The ACCC will not oppose Mitolo's proposed acquisition of Thomas Foods International's (TFI) potato business.
Mitolo and the TFI potato business grow potatoes and operate packing sheds in South Australia, and overlap in the acquisition of some potatoes from third party growers in the state, and the supply of washed potatoes to supermarkets and wholesalers.
"The ACCC closely examined the effect of Mitolo's acquisition of TFI on South Australian potato growers, rival packing sheds, and retail and wholesale customers of the parties," ACCC Deputy Chair Mick Keogh said.
"The decline in consumer demand for potatoes has created difficult circumstances for potato growers, which will continue to affect growers regardless of the transaction."
"However, feedback from potato growers and other industry participants suggested that if Mitolo sought to lower prices it paid growers, most growers would be able to switch to rival packing sheds, and some would be able to swap to growing potatoes for processing into potato products," Mr Keogh said.
The ACCC also determined that rival packing sheds would continue to provide a viable alternative source of supply for retail and wholesale customers, if Mitolo tried to increase potato prices or decrease quality.
The ACCC lastly considered whether Mitolo's acquisition of potato varieties currently held by the TFI potato business would affect competition for registered potato variety licenses.
"We concluded that growers and packing sheds will continue to be able to access a range of other varieties as well as future varieties that are being developed, allowing them to compete with Mitolo both now and in the future," Mr Keogh said.
Further information is available at Mitolo Group's proposed acquisition of Thomas Foods International's potato business
Background
Mitolo is a vertically integrated fresh potato and onion growing wholesale supply business operating packing sheds in South Australia and New South Wales.
Mitolo supplies fresh washed and brushed potatoes to retailers and wholesalers in all states and territories except for Western Australia and Tasmania. Mitolo predominantly grows the potatoes that it supplies, but also acquires a small proportion of potatoes from third party growers.
The TFI potato business is a vertically integrated business that grows and packs fresh washed potatoes at its packing shed in South Australia. It supplies fresh washed potatoes for retail, wholesale and export channels. The TFI potato business also acquires fresh washed potatoes from third party growers, in addition to growing a proportion of its own fresh washed potatoes.
The TFI potato business is owned by Thomas Foods International Pty Ltd, an Australian based business established in 1988, which primarily operates a meat packing business.
Thomas Foods International has operated the TFI potato business since July 2013, when it acquired the fresh washed potato business of Mondello Farms.
