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Australian watchdog says JBS' deal for pork processor Rivalea raises competition concerns

17 September 2021, at 1:44am

Australia's competition regulator has raised concerns over meatpacker JBS SA's proposed A$175 million ($128.3 million) acquisition of pork processor Rivalea.

Reuters reports that Brazil's JBS in June announced an agreement to buy Rivalea from Singapore-listed QAF Ltd in a deal that would make it Australia's market leader in pork processing.

If the deal proceeds, JBS will have a significant presence in pig farming, export-accredited pig abattoirs, and related products through its Primo Smallgoods brand, the Australian Competition and Consumer Commission (ACCC) said.

“We are concerned that JBS’ existing interests may give it the incentive to restrict access to service kills at the Diamond Valley Pork abattoir, as well as frustrating access to fresh pork for its downstream rivals in smallgoods production and pork wholesaling. Our concern is not limited to JBS potentially denying access to processing facilities, it’s also about the price and terms on which access would be provided,” Mr Keogh said in a press statement.

The ACCC believes the proposed acquisition is unlikely to raise horizontal overlap concerns in relation to the acquisition of slaughter weight pigs, supply of service kills or pork processing.

The regulator also raised concerns that after the deal, JBS may raise the price of fresh pork .

"The ACCC's preliminary view is that while JBS and Rivalea do not compete closely, the proposed acquisition may give rise to vertical integration concerns," Keogh added.

JBS, QAF and Rivalea did not immediately respond to requests for comment.

($1 = 1.3646 Australian dollars)