The ACCC will not oppose the proposed acquisition of the Oxford cold storage business by Emergent Cold.
Emergent Cold and Oxford are two significant suppliers of third party cold storage services in Victoria. Emergent Cold operates cold storage facilities around Australia and overseas, including five sites in Victoria. Oxford only operates in Victoria, where it has a site in Laverton North.
"The proposed acquisition raised preliminary concerns for the ACCC, but after closely considering further information received from the market and the parties, our view is that the deal is unlikely to substantially lessen competition," ACCC Commissioner Stephen Ridgeway said.
"Some market participants were worried that Emergent Cold was removing its closest competitor and would gain control of almost 40 per cent of third-party cold storage capacity in Victoria. The ACCC took these concerns seriously."
There are two other large suppliers of cold storage services in Victoria, NewCold and Americold, both of which are part of multi-national cold storage businesses. Other competitors include AHG Refrigerated Logistics, Linfox and numerous smaller businesses.
"The ACCC ultimately found that, although there are some differences between how existing cold storage suppliers operate, the combined Emergent Cold-Oxford is still likely to face close competition in Victoria from a range of large and small alternative suppliers," Mr Ridgeway said.
The ACCC also took into account the potential for competing Victorian cold storage suppliers to expand and build new capacity in response to demand in the coming years, including the ability of some larger customers to sponsor such expansion if required.
Additionally, the ACCC considered the possibility that increases in the price of third party cold storage services may lead to some larger customers providing their own cold storage services in house in the future.
Taking into account the collective impact of these factors, the ACCC decided not to oppose the proposed acquisition.
Further information is available at Emergent Cold proposed acquisition of AB Oxford Cold Storage Company.
Background
The ACCC issued a statement of issues in relation to the proposed acquisition in August 2019.
Emergent Cold is a wholly owned subsidiary of Emergent Cold L.P., a US-based provider of refrigerated third-party logistics and management services. Emergent Cold operates five cold storage facilities in Victoria at sites in Laverton, Allansford, Truganina, Lyndhurst and Tullamarine.
Emergent Cold entered the Australian market in late 2017, through its acquisition of the cold storage business of John Swire & Sons, Swire Cold Storage. It expanded in late 2018 by acquiring Montague Cold Storage.
