Murray Goulburn deal stalls over Koroit factory

THE takeover of Murray Goulburn can go ahead immediately, if it excludes the Koroit milk factory, the government’s competition watchdog has said.

Australian Competition and Consumer Commission chairman Rod Sims said yesterday the only concern he has with the deal is the inclusion of the milk processing plant in the south west of Victoria.

“The rest of the transaction is fine,” Mr Sims said yesterday.

“Saputo can effectively buy 70 per cent of Murray Goulburn, we have no objections, it would be a good outcome, just not the Koroit plant,” he said.

“If Saputo really wants to move quickly the ball's in their court. If they go ahead without Koroit or divest Koroit, then the transaction can proceed.”

Saputo’s existing Allansford plant is only 16km away from Koroit. “These two plants combined under one owner would have two-thirds of the processing capacity in that market. Our concern with a player with that much capacity will mean less money paid to farmers,” Mr Sims said.