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Mitolo gets green light to acquire potato business

  • Posted on Thursday 6th, August 2020.

The Australian Competition & Consumer Commission (ACCC) will not oppose Mitolo’s proposed acquisition of Thomas Foods International.

Mitolo and TFI's potato business grow potatoes and operate packing sheds in South Australia, and overlap in the acquisition of some potatoes from third party growers in the state, and the supply of washed potatoes to supermarkets and wholesalers.

“The ACCC closely examined the effect of Mitolo’s acquisition of TFI on South Australian potato growers, rival packing sheds, and retail and wholesale customers of the parties,” said ACCC Deputy Chair, Mick Keogh.

“The decline in consumer demand for potatoes has created difficult circumstances for potato growers, which will continue to affect growers regardless of the transaction.

“However, feedback from potato growers and other industry participants suggested that if Mitolo sought to lower prices it paid growers, most growers would be able to switch to rival packing sheds, and some would be able to swap to growing potatoes for processing into potato products,” he said.

The ACCC also determined that rival packing sheds would continue to provide a viable alternative source of supply for retail and wholesale customers, if Mitolo tried to increase potato prices or decrease quality.

The ACCC lastly considered whether Mitolo’s acquisition of potato varieties currently held by the TFI potato business would affect competition for registered potato variety licenses.

“We concluded that growers and packing sheds will continue to be able to access a range of other varieties as well as future varieties that are being developed, allowing them to compete with Mitolo both now and in the future,” said Keogh.

The Mitolo Group, formerly Commit Farm Produce, is a family owned company based in South Australia based in Virginia with farming sites located in the Riverland, Mallee and Adelaide Plains.

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