The ACCC will not oppose the acquisition of Perth-based cold storage supplier Bigstreet Pty Ltd trading as Fremantle City Coldstores (FCC) by Australian subsidiaries of Lineage Logistics Holdings LLC.
Lineage and FCC supply cold storage and warehousing services to a range of customers in Perth, including food manufacturers, retailers, and meat and seafood processors.
The ACCC's review focused on whether the removal of FCC as a result of the proposed acquisition would substantially lessen competition in the supply of cold storage services in Perth. This included testing the closeness of competition between Lineage and FCC.
"During our investigation, we engaged with a range of industry participants, including customers of both FCC and Lineage. We ultimately found that the transaction would not be likely to substantially lessen competition," ACCC Commissioner Dr Philip Williams said.
The review found that while Lineage and FCC do compete to supply a similar group of customers in Perth, FCC represents a small portion of the total Perth market.
The combined Lineage-FCC entity will continue to face competition from significant competitors such as Americold, Golden West, and several other smaller suppliers.
"Our consultation with the market has confirmed that recent expansions by competitors have led to additional capacity for cold storage in Perth. This additional capacity means customers will continue to be able to switch cold storage suppliers to seek better prices or service quality," Dr Williams said.
More information can be found on the ACCC's website at Lineage Logistics Holdings LLC - Fremantle City Coldstores.
Note
In considering the proposed acquisition, the ACCC applies the legal test set out in section 50 of the Competition and Consumer Act.
In general terms, section 50 prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market.
Background
Lineage is a global cold storage and logistics business with cold storage facilities throughout Australia. Lineage currently has two Perth facilities located in Welshpool and Banjup. It provides temperature-controlled storage as well as additional services including blast freezing, picking and packing, container loading and unloading, transport, and export documentation.
FCC operates a single cold storage facility in Spearwood, near the port of Fremantle. As well as temperature-controlled storage, it supplies services including blast freezing, picking and packing, container loading and unloading, and export documentation.
In conducting this review, the ACCC has taken into account its findings in an ex-post review of Emergent Cold's acquisition of AB Oxford Cold Storage in Victoria. This ex post review provided the ACCC with important insights into the market dynamics of cold storage in Victoria post completion of Emergent Cold's acquisition. The link to the report can be found here: Ex post review of ACCC merger decisions.
