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ACCC looks at world’s biggest meat processor move on Primo

The Primo smallgoods factory at Wacol and adjoining Hans Factory outlet will be taken over by JBS.
The Primo smallgoods factory at Wacol and adjoining Hans Factory outlet will be taken over by JBS. Sarah Harvey

THE proposed purchase of the Primo Group by the world's largest fresh meats processor, Brazilian giant JBS, will be examined by the Australian Competition and Consumer Commission.

The examination comes after the Cattle Council of Australia asked the ACCC to look into possible competition issues surrounding the planned purchase.

The proposed $1.5 billion deal has led to concerns among some sections of the primary industry that it would narrow the number of buyers within the Australian market.

The ABC reported that the ACCC wanted anyone wishing to contribute a comment on the deal to get their submission to it by December 17, with a decision by January.

Beef industry analyst Robert Hermann, a director with Mecardo, said he would expect the competition watchdog to scrutinise the deal carefully.

"Any reduction in competition takes away from what we are looking for in a market where supply is a bit tight and we'd like to see people paying a fair price," Mr Hermann said. JBS Australia chief executive Brent Eastwood said there was no cause for concern.

Despite the assurance, Mr Hermann said history would indicate otherwise.

"Any rational assessment of this move would see that.

"Over time we've seen it in other industries, the wool industry, you see it in the grain industry. For instance, when businesses combine or get taken over or merge, they maintain their profile for a short period of time, but eventually the rationalisation says why wouldn't you look at a more efficient way of doing it, and that's the concern.

"You've got to make sure that it doesn't become ... the gorilla in the room that beats everyone up."

Topics:  accc business jbs australia



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