THE Australian Competition and Consumer Commission has delayed its decision on the proposed take-over of Delta Agribusiness by Elders Limited.

Initially expected on March 13, the decision has been delayed as the competition watchdog seeks further information from the merger parties.

On its website, the ACCC stated on March 7 it would announce a revised provisional decision date “in due course”.

The delay has been welcomed by representative body Grain Producers Australia, which in January made a submission to the ACCC opposing the take-over.

GPA expressed concerns the ASX-listed company’s proposed acquisition, announced in November, carried potential competition implications, with risks to input costs and reliability of supply for the grain and related industries.

GPA southern director and Victorian grower Andrew Weidemann said GPA’s submission to the ACCC review process was informed by invaluable input provided by GPA’s state members, and complemented representations from other farm sectors.

Mr Weidemann said GPA’s ACCC submission expressed members’ concerns about the impact 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,” Mr Weidemann 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 information needed to properly consider the proposal and ensure producers were protected, especially from increased input costs already at historic high levels.

GPA’s submission, which remains confidential, also provided evidence for the ACCC to consider, showing 30 locations where Elders and Delta currently have directly competing retail premises within a shared postcode.

The submissions said GPA was “highly sceptical” about whether the proposed parts of this merger entity, if allowed to proceed, will continue to compete vigourously, 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.

“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 making growers less able to access innovations.

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 producers’ policy priorities, had nominated high input costs as the top priority for action.

Mr Bettles said GPA would continue monitoring the ACCC process closely to ensure producers and rural communities were protected from potential consequences of reduced competition.

GPA’s submission to the ACCC states the nominal prices of fertiliser, crop chemicals and fuel inputs in Australia have increased 70-117 percent in the five years to 2023, well ahead of inflation over this period.

Source: GPA