They have made their views known to the country’s competition watchdog.
The Australian Competition and Consumer Commission said the transaction “raised strong concerns” among “a significant number of industry participants”.
The ACCC said the deal would “result in a major structural change” in Australia’s dairy sector. If approved, the acquisition would be the first time a supermarket “owns and operates its own milk processing facilities”, the regulator said.
The deal would see Coles buy two plants in Laverton North in Victoria and in Erskine Park in New South Wales for around $95 million Cdn.
At present, Coles acquires raw milk from farmers in Victoria and New South Wales. The retailer processes the milk at these plants under an arrangement with Saputo.
“For NSW dairy farmers, concerns have been raised that this acquisition may change Saputo’s incentives to continue acquiring raw milk in NSW.
“If Saputo does exit NSW as a result of the acquisition, this would leave limited competition in regions of NSW, which could result in farmers receiving lower prices for their raw milk,” said Mick Keogh, the deputy chair of ACCC.
