Declining consumption of potatoes in Australia is not enough reason to block the sale of Thomas Foods International’s potato packing business to fellow South Australian-based rival Mitolo, says the national competition regulator. Andrew Marshall reports for Farm Weekly.
While competition within the potato market would reduce if Mitolo absorbed TFI’s packing and wholesale business, and a general slowing demand trend had created “difficult circumstances” for potato growers, the Australian Competition and Consumer Commission said most growers had other market options if unhappy about Mitolo’s conditions.
The consumption decline would also continue to affect Australian growers regardless of whether the transaction went ahead.
“Feedback from potato growers and other industry participants suggested if Mitolo sought to lower prices it paid growers, most producers would be able to switch to rival packing sheds,” said ACCC deputy chairman Mick Keogh.
Mitolo and TFI grow potatoes and operate packing sheds in SA, and overlap in the acquisition of some crops from third party growers, and the supply of washed potatoes to supermarkets and wholesalers.
Source: Farm Weekly. Full article here