Competition regulator to review Mengniu bid for Lion dairy business

The competition regulator will review the proposed $600 million sale of Lion’s dairy and drinks business to China Mengniu Dairy, as concerns grow over whether the deal will reduce competition and impact dairy farmers.

The Australian Competition and Consumer Commission (ACCC) said the two parties overlapped in the acquisition of milk from farms in the Gippsland region of Victoria, one of the country’s most productive dairying regions.

The competition regulator will take a close look at the potential impact of Mengniu’s $600 million acquisition of Lion’s dairy and drinks business on dairy farmers in Gippsland.Credit:Mick Tsikas

The ACCC has asked interested parties to come forward to outline any “competition concerns” stemming from the deal. It is also seeking views on the potential impact of the deal on prices paid to Gippsland dairy farmers for their milk, and on the terms of their supply arrangements.

Mengniu has significant ties with South Gippsland-based dairy processor Burra Foods. A Mengniu subsidiary owns a 43.35 per cent minority stake in a company called Inner Mongolia Fuuyuan International Industrial, which in turn owns 51.35 per cent of Burra Foods.


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