ACCC flags concerns on Emergent's Oxford takeover


Tight Victorian cold storage market sees customers raise alarm

ACCC flags concerns on Emergent's Oxford takeover
Emergent's bid is under competition scrutiny

 

The Australian Competition and Consumer Commission (ACCC) has raised preliminary competition concerns about Emergent Cold’s proposed acquisition of rival cold storage operator Oxford, outlined in a statement of issues published today.

The competition watchdog observes that Oxford and Emergent Cold are the second and third biggest suppliers of third-party cold storage services in Victoria.

 "This acquisition would reduce the number of large Victorian suppliers from four to three," ACCC chair Rod Sims says.

"A significant number of customers have raised concerns with the ACCC about this deal.

"They consider Emergent Cold and Oxford to be each other’s closest competitors, as the companies provide similar services to similar customers."


Read how the Oxford takeover deal emerged, here


The combined Emergent Cold-Oxford would become the biggest supplier of third-party cold storage services in Victoria, controlling almost 40 per cent of total market capacity, the watchdog notes.

"Market feedback indicates that the other main suppliers, Americold and NewCold, have limited spare capacity and business models that focus on supplying the largest customers," it says.

The ACCC is seeking further information from market participants about the level of competition that would remain if the deal proceeds, as well as the ease and likelihood of entry by new operators.

It invites submissions by August 30 and a final decision is scheduled for November 7. 

A statement of issues can be found here.

 

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