ACCC seeks Ruralco takeover submissions

By: Andrew Hobbs

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Competition concerns over Landmark's proposed acquisition of Ruralco brands, including CRT, Roberts and Rodwells

ACCC seeks Ruralco takeover submissions
CRT and other Ruralco brands will become part of Landmark if the proposed acquisition goes ahead

 

The Canadian giant behind agricultural trader Landmark has hit a snag in its proposed takeover of Ruralco – the parent company of CRT, Roberts and Rodwells – after Australia’s competition regulator raised concerns.

The Australian Competition and Consumer Commission (ACCC) is seeking public submissions on what the buyout of Ruralco by Nutrien would mean for competition for rural merchandise, such as fertiliser, fencing and animal health products.

ACCC deputy chair Mick Keogh says the combined entity created by the deal, which offered to buy  Ruralco shares at $4.40 each, would supply around 650 rural merchandise stores – which he says is about 45 per cent of all rural merchandise stores nationally.

"A merged Landmark-Ruralco would be by far the largest retail and wholesale supplier of rural merchandise in Australia, with Elders the only other large national chain," he says.

"We are seeking submissions … and will continue examining what impact the loss of a major national retail competitor might have on prices, product range (including private label brands) and other areas of competition."

In some good news for the companies, the ACCC did say it had come to a preliminary view that bringing together Landmark and Ruralco would not lessen competition in either wool broking, livestock agency and live export, insurance broking, financial services or real estate agency services.

But the ACCC also noted that there are a number of local areas, including Broome (WA), Alice Springs (NT), Cooma (NSW) and Hughenden (Queensland), where Landmark’s rural merchandise stores compete with Ruralco stores and there would be few remaining competitors if the purchase went ahead.

"The ACCC is considering whether delivery from outside these regions would provide sufficient competition to the Ruralco-Landmark retail stores," it says.

It was also looking at whether the proposed acquisition would reduce wholesale competition – noting CRT and associated Ruralco companies are major wholesalers to independent rural merchandise stores – or whether remaining wholesalers AIRR, NRI and AgLink would provide sufficient competition.

"In addition, the ACCC is examining whether a merged Landmark-Ruralco would be more likely to discriminate against retailers which are wholesale customers that compete with its retail stores," the statement says.

In an announcement, Ruralco says it is confident that all the issues raised will be addressed to the ACCC’s satisfaction.

"Ruralco continues to believe the scheme will create a robust rural services provider, with significant benefits for farmers, businesses and communities across regional and rural Australia," it says.

If you want to make a submission to the ACCC about the deal, you can email mergers@accc.gov.au with the title: "Submission re: Landmark – Ruralco attention Matthew Thomas" – with the regulator saying it prefers submissions in PDF format.

Alternatively submissions may be mailed to the Merger Investigations Branch, ACCC, GPO Box 3131, Canberra ACT 2601.

All submissions should be provided by 27 June 2019, with the ACCC’s final decision scheduled for 15 August 2019.

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