ACCC gives Coles milk processing purchase the nod

The news: The ACCC won't stand in the way of Coles buying two milk processing plants from Saputo and expects no "substantial lessening" of competition from the supermarket giant's supply chain expansion.

The numbers: Coles has proposed to buy the two milk processing facilities in NSW and Victoria. It is currently the biggest customer of both facilities.

The context: Coles and Saputo both purchase raw milk from dairy farmers in Victoria and NSW. The ACCC said it consulted closely with dairy industry participants, with some concerned the deal would unfairly increase Coles' bargaining power along the dairy supply chain and ultimately lead to Saputo's exit from the NSW raw milk market. It determined Saputo would buy raw milk for at least the next five years, based on an agreement the processor had recently signed with Coles. The regulator also found that competitors such as Lactalis and Bega would continue to compete for raw milk in NSW.

What they said: "After careful consideration, we concluded that, compared with the current state of competition where the majority of the capacity at these facilities is already contracted to Coles, the acquisition is unlikely to result in a substantial lessening of competition in breach of section 50 of the Competition and Consumer Act," ACCC Deputy Chair Mick Keogh said in a statement.