AUSTRALIA – The Senate Rural and Regional Affairs Committee has recommended that greater scrutiny is needed on the proposed takeover of GrainCorp by an Australian subsidiary of Archer Daniels Midland (ADM).
Australian government officials have opted to take a second look at the AUS$3.4 billion ADM acquisition as a means of assessing whether the move is in the best interests of farmers and the nation.
The interim report could mean a potential review of the Australian Competition and Consumer Commission’s decision to approve the takeover in June.
Daniel Cooper, New South Wales Farmers grains spokesperson welcomed the committee’s announcement as it brings back the key issue of Toepfer’s removal from the market.
Mr Cooper blamed the Australian Competition and Consumer Commission for the oversight that the takeover would not have a lessening effect on grain market competition.
“The sale of GrainCorp would immediately remove Toepfer, which is 80 per cent owned by ADM, out of the market for Australian grain, reducing the competitive tension in an already concentrated market place," said Mr Cooper.
“The sale will also potentially give ADM a majority share in one of Australia’s largest individual end users of grain - Allied Mills - which is currently a joint venture between GrainCorp and another giant American agribusiness Cargill.”
Growers are concerned about GrainCorp’s current monopoly on grain storage and handling, added Mr Cooper.
He said that the company’s handling infrastructure controls markets, typical of ADM’s anti-competitive history.
“The Senate Committee has highlighted ADM’s history of anti-competitive behaviour and how it would leave growers vulnerable because of its dominant market position,” said Mr Cooper.
The takeover of Australia’s biggest agribusiness, GrainCorp, was first announced on May 1 this year.
Several trading nations have been involved in an approval process since the announcement. The competition authorities of Australia, South Africa, Japan, Canada, the US in November and latterly Europe and South Korea have approved the sale.
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