Lactalis Advances in Acquisition of Fonterra Assets in Australia

Lactalis, the world’s largest dairy company, is making significant strides in acquiring Fonterra’s Australian assets. The Australian Competition and Consumer Commission (ACCC) has announced its decision not to oppose the acquisition, granting Lactalis a major boost in its expansion efforts within the competitive Australian dairy market, a critical region for global milk production.

The assets in question include Fonterra’s consumer, dairy ingredients, and foodservice businesses in Australia, which the New Zealand cooperative has put on sale as part of its strategic divestment. With the ACCC's green light, Lactalis Australia is positioned advantageously against other bidders, such as Australia’s Bega Cheese, which teamed up with the Netherlands’ FrieslandCampina, and Japan’s Meiji Holdings.

The decision followed a comprehensive analysis by the ACCC, despite concerns raised by some bodies. ACCC Vice Chair Mick Keogh stated that it is unlikely the acquisition will significantly lessen competition in the dairy sector. Both Lactalis and Fonterra currently source raw milk from dairy producers in Victoria and Tasmania, supplying a wide range of dairy products across Australia.

Should the acquisition materialize, it will not only reshape the Australian dairy industry but may also impact the global dairy market. For producers, this could mean changes in contract relationships and price dynamics, while for the dairy industry as a whole, it marks another step towards the consolidation of major players and the redefinition of global supply chains.