Australian watchdog says JBS’ deal for Rivalea raises competition concerns

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The logo of Brazilian meatpacker JBS SA is seen in the city of Jundiai, Brazil June 1, 2017. REUTERS/Paulo Whitaker/File Photo

Sept 16 (Reuters) – Australia’s competition regulator on Thursday raised concerns over meatpacker JBS SA’s (JBSS3.SA) proposed A$175 million ($128.3 million) acquisition of pork processor Rivalea.

Brazil’s JBS in June announced an agreement to buy Rivalea from Singapore-listed QAF Ltd (QAFS.SI) 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.

“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,” ACCC Deputy Chair Mick Keogh said.

The regulator also raised concerns that after the deal, JBS may raise the price of fresh pork or reduce the supply of pork to some producers from Rivalea’s Diamond Valley Pork abattoir.

“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)

Reporting by Tejaswi Marthi in Bengaluru; Additional reporting by Riya Sharma; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

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