Emergent bid for Oxford under ACCC scrutiny


Competition watchdog seeks views on refrigerated logistics takeover

Emergent bid for Oxford under ACCC scrutiny
Emergent’s takeover will have to wait

 

Further consolidation of the Australian cold storage and logistics sector will have to await an Australian Competition and Consumer Commission (ACCC) probe on its market ramifications.

The ACCC is seeking community and industry views on the proposed acquisition of AB Oxford Cold Storage Company by Emergent Cold.

Emergent Cold provides cold storage services nationally through its facilities in Victoria, New South Wales, Queensland, South Australia and Western Australia.

Oxford provides cold storage services through its facility in Laverton North, Victoria.

The ACCC’s investigation is focused on the impact on competition.

 In particular, it is seeking views on:

the impact on prices for the supply of cold storage services in Victoria

whether Oxford and Emergent Cold compete closely for the supply of cold storage services in Victoria

the extent to which existing competitors could expand or new entrants could commence supply of cold storage service in Victoria

whether customers are able to self-supply cold storage services in response to an increase in price.

"The legal test which the ACCC applies in considering the proposed acquisition is in section 50 of the Competition and Consumer Act 2010," the ACCC states in a letter to interested parties.

"Section 50 prohibits acquisitions that are likely to have the effect of substantially lessening competition in a market."


Read how the Oxford bid surfaced earlier this month, here 


US giant Emergent Cold has had a busy past 18 months in Australia, having already added Victoria’s Montague Cold Storage in January after snapping up Swire Cold Storage (SCS) assets the previous February.

It presently has more than 300,000 pallet spaces of cold storage capacity across its sites in:

  • Laverton, Allansford, Truganina, Lyndhurst and Tullamarine in Victoria
  • Lurnea in NSW
  • Cannon Hill and Hemmant in Queensland
  • Dry Creek in South Australia
  • Welshpool in Western Australia.

Emergent Cold supplies services that include automated blast freezing, chilled and frozen storage, cross-dock order picking, associated logistic services, consolidation and import/export management assistance.

It also operates a fleet of refrigerated vehicles and trailers that supply refrigerated transport services in Australia.

Oxford has one cold storage facility in Laverton North, Victoria.

This facility has about 155,000 pallet spaces of cold storage capacity and some ambient storage capacity.

Oxford supplies frozen and chilled storage and handling services, and other associated services which include pick/pack, wrapping, labelling, supplier-integrated inventory management through electronic data interchange and full product tracking and recall.

The issue arises at a time when the sector is in some flux, with Automotive Holding Group (AHG) also still looking at options for its consolidated cold logistics operations.

  

You can also follow our updates by joining our LinkedIn group or liking us on Facebook