Brazilian meat company JBS has finalised a deal to buy leading Australian pork processing company Rivalea.
JBS has finalised a deal to buy pork processor Rivalea
It gives the company a dominant share of the pork processing sector
Small producers are still concerned despite assurances from JBS and the ACCC
The deal was opposed by farmers concerned about a loss of competition, but it was approved by the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB).
The deal gives JBS control of three of the four export pork abattoirs in southern Australia.
It has bought 100 per cent of Rivalea Holdings Pty Ltd and 100 per cent of Oxdale Dairy Enterprise Pty Ltd (together Rivalea) from Singapore-listed food company QAF Limited for $175 million.
Rivalea Holdings owns two subsidiaries incorporated in Australia, namely Rivalea (Australia) Pty Ltd and is a majority shareholder in Diamond Valley Pork Pty Ltd (DVP).
Smaller pork producers said the deal could make it harder for them to get their livestock processed at the Diamond Valley Pork plant.
The ACCC, however, felt it was unlikely JBS would profit from that and ultimately raised no objections to the proposal.
‘Not good news’
Small-scale pig producers like Tammi Jonas, a member of the Australian Food Sovereignty Alliance, are concerned about industry consolidation.
“We’ve had a reduction in the number of owners of slaughter facilities in this country that’s been going on for decades,” she said.
“So further consolidation into one multinational corporation is not good news for those of us who are small scale.”
‘Got to trust it’
However, Tim Kingma, president of the Victorian Farmers Federation’s pig group, said he trusted JBS’s assurances about retaining service kills.
“You’ve got to trust it. If you look at their other acquisitions in red meat, they haven’t got rid of third-party service kills,” Mr Kingma said.
JBS declined to comment about the sale but, in a statement, said it would continue to provide kill services at DVP for customers and also grow the customer base.
“We have provided this assurance directly to all DVP customers in writing, to local pork groups including the Victorian Farmers Federation and the ACCC.”
What it means for employees
JBS Australia chief executive Brent Eastwood said he was excited to welcome Rivalea to the JBS group.
“Rivalea is a crucial part of Australia’s pork supply chain, and we believe we can work together to create an improved and more efficient pork processing business for Rivalea customers by using JBS’s experience as a major meat and food processor.”
The company said it would work alongside Rivalea chief executive Mick Hewat and Rivalea team.
“JBS Australia is committed to … growing the business through new opportunities for Australian-grown pork.
“We look forward to working closely with Rivalea’s management and workforce, existing customers, suppliers and contractors, to achieve this.”