Grain Producers Australia has welcomed the Australian Competition and Consumer Commission’s (ACCC) move to delay a decision on the proposed take-over of Delta Agribusiness, by Elders Limited.
The ACCC’s original provisional date to announce a decision was due today (13 March 2025).
But a statement posted recently on the competition watchdog’s website states the ACCC is now seeking further information, from the merger parties. ‘The ACCC will announce a revised provisional decision date in due course.’ HERE
In January, GPA submitted to the ACCC’s review of the proposed take-over, opposing the deal.
GPA expressed concerns the ASX listed company’s proposed acquisition – revealed in November last year – carries potential competition implications, with risks to input costs and reliability of supply; not only for the Australian grains sector, but also other major farm commodities. HERE
GPA Southern Director, Andrew Weidemann, said GPA’s submission to the ACCC review process was informed by invaluable input provided by GPA’s State Members, for grain producer members, and complemented by those of other farm commodity representatives.
Mr Weidemann said GPA’s ACCC submission expressed members’ concerns about a ‘creeping tide of consolidation’, in Australia’s rural supply markets.
“This has occurred progressively over the last 5-10 years through a series of ‘creeping or serial’ mergers and acquisitions involving wholesale, retail and vertically integrated rural supply businesses,” he said.
“This market evolution has progressively led to a substantial lessening of competition in these critical markets to the detriment of farmers and the wider Australian public.
“GPA is concerned that Elders Limited’s proposed takeover of Delta Agribusiness will substantially lessen competition in localised retail markets for rural supplies and the Australian wholesale supply market for key cropping inputs such as crop protection chemicals, fertilisers and seed.”
Mr Weidemann said the ACCC’s delayed decision would allow more time to gather the information needed, to properly consider the proposal and ensure producers were protected; especially from increased input costs which were already at historic high levels.
GPA’s submission – which remains confidential – also provided evidence for the ACCC to consider, showing 30 different locations where Elders and Delta currently have directly competing retail premises (based on post codes).
It says GPA is ‘highly sceptical’ about whether the proposed parts of this merger entity, if allowed to proceed, will continue to ‘vigorously compete’ in the future, adding to the risk it will lead to a ‘substantial lessening of retail competition in multiple locations around Australia’.
“Elders proposed takeover would also substantially reduce wholesale supply options for independent retailers in Australia, most evidently in Western Australia,” it says.
“This has the potential to further hamper the ability of independent stores to effectively compete with the expanding Elders and Nutrien duopoly.
“The ACCC has previously identified the important role independent stores and small chains play in ensuring competitive tension in Australia’s rural supplies markets – Elders proposed takeover of Delta would have major detrimental impacts on these important players in this market.
“GPA is also concerned a merger Elders-Delta entity may look to rationalise wholesale warehousing sites in a bid to realise efficiency dividends, undermining growers’ ability to rapidly and reliably access critical production inputs. This impact would be to the great detriment of the Australian public.”
Mr Weidemann said the proposed transaction also had the potential to further entrench bargaining power imbalances, leading to further harm to the effective functioning of crop input markets in Australia – potentially meaning growers are less able to access new innovations.
“Given these multiple factors, GPA’s submission urges the ACCC to oppose the passage of this proposed takeover,” he said.
GPA Chief Executive, Colin Bettles, said extending the ACCC review timeline also conflated with the looming Federal Election, where GPA’s recent survey, on grain producer policy priorities, had nominated high input costs the costs as the number one priority for action. HERE
He said GPA would continue monitoring the ACCC process closely, to ensure producers and rural communities are protected from potential consequences of reduced market competition.
GPA’s submission to the ACCC highlights the need for reliable access to competitively priced crop inputs as being ‘critical to the profitability and sustainability of Australian grain farming businesses’.
It provides data showing, for specialist grain cropping farms, fertiliser has represented the highest input cost (on average over the last five years (at $263K p.a or 19pc of input costs (excl labour), with crop and pasture chemicals representing 17.5pc of costs (or $246K p.a) and fuel and oil the third largest at around 8pc ($107K) (ABARES, 2024). And:
“The nominal prices of fertiliser, crop chemicals and fuel inputs in Australia have increased by 70-117pc in the five years since pre-pandemic (2019-2023), well ahead of inflation over this period.
“Ensuring competitive and functional markets for key cropping inputs is essential to ensure Australian producers can affordably access the modern innovations they depend on to sustainably grow crops.”
GPA urges the ACCC to conduct proper, detailed scrutiny of the potential harm and economic consequences for the national grains industry, and broader farming sector and communities.
BACKGROUND
ACCC Home Page HERE
On 18 November 2024, Elders Limited (Elders) entered into a Share Sale Agreement to acquire 100 [per cent of the shares in Delta Agribusiness (Delta) (the proposed acquisition). Elders is an ASX-listed agribusiness that supplies a range of agriculture-related products and services. Elders operates 245 retail stores, as well as a buying and marketing group called Australian Independent Rural Retailers (AIRR) which distributes rural merchandise on a wholesale basis.
Delta is an Australian agribusiness that supplies a range of agriculture-related products and services. Delta supplies rural merchandise and provides farm consultancy and production agronomy services, grain marketing services and livestock agency services. Delta operates 64 retail stores primarily in regional areas of New South Wales, Victoria, South Australia and Western Australia, and also operates a wholesale business (Delta WA) in Western Australia.
Review Timeline
16 Dec 2024 – ACCC commenced informal review under the Informal Merger Review Process Guidelines.
10 Jan 2025 – Closing date for submissions.
13 Mar 2025 – Provisional date for announcement of ACCC’s findings (as outlined in the Informal Merger Review Process Guidelines, this may be a final decision or release of a Statement of Issues). (Now delayed)
ENDS
Further Information:
GPA Southern Director Andrew Weidemann: 0428 504 544
GPA Chief Executive Colin Bettles: 0439 901 970
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