ACCC approves Mitolo’s proposed acquisition of TFI’s potato business

The Australian Competition and Consumer Commission (ACCC) has approved Mitolo Group’s proposed acquisition of Thomas Foods International’s (TFI) potato business.

Mitolo Group grows and supplies fresh potatoes and onions in South Australia and New South Wales (NSW).

TFI’s potato business is engaged in cultivation and packaging of fresh potatoes for wholesale and export markets.

Under the deal, Mitolo proposed to acquire TFI’s packing facility in Penfield, South Australia, the freehold ownership of Acacia Farm (Pinnaroo) and a leasehold interest over a property, Blanchetown.

ACCC Deputy Chair Mick Keogh said: “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.

“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.”

ACCC has analysed the impact of the deal at various levels of the potato supply chain and come to the conclusion that the acquisition was unlikely to substantially lessen competition in any relevant market.

It also determined that rival packing sheds would serve as the alternative source of supply for retail and wholesale customers if Mitolo tried to increase potato prices or decrease quality.

Mitolo and TFI potato business grow potatoes and operate packing sheds in South Australia.