Brothers Michael and Terry Nolan, left, with Mick and Ben Hewitt from Hewitt Australia, overlooking the Nolan Meats processing site near Gympie in southern Queensland.

THE Australian Competition & Consumer Commission has cleared the way for Hewitt Australia to complete its purchase of Queensland beef processing business Nolan Meats.

In a judgement handed down last week, the ACCC said the acquisition “may be put into effect.”

Hewitt Australia is a majority-owned subsidiary of the Canadian Public Sector Pension Investment Board, an investment management fund established by the Parliament of Canada. The remaining shares in Hewitt are owned by Queensland’s Hewitt family.

Hewitt and the Nolan family announced via Beef Central back on 18 May that they planned to transact the Nolan Meats business, “subject to regulatory and other customary approvals.”  It was not made clear at the time whether the proposed acquisition must also be approved by the Foreign Investment Review Board.

Australia has not seen Canadian equity in its beef processing industry since the days of Canada Beef Packers’ joint venture with the Teys family, established in 1972, ending in 1986 when the Teys family bought-out its partner.

In conducting its competition assessment over the Nolan purchase, an ACCC advice said it considered information and documents provided by the sale parties, as well as information from third parties.

The competition watchdog said it considered that the acquisition was unlikely to substantially lessen competition in any market.

Hewitt Australia is headquartered in Brisbane. The red meat producer runs cattle and sheep, mostly under certified organic principles. The company has been a service kill customer for organic beef at Nolan Meats, located near Gympie, north of Brisbane, for some time.

Hewitt also carries out secondary processing of beef into value-added products such as beef patties, and is involved in the packaging, marketing, sale and distribution of Organic beef to supermarkets, the food service industry, butchers and international customers.

The 70 year-old family-owned Nolan Meats business, founded by the late Pat Nolan and further developed by his sons Michael and Terry Nolan, and their late brother  Tony, is a beef processor headquartered near Gympie.

Nolan Meats undertakes lotfeeding of cattle, primary processing of cattle (slaughter and boning), and wholesale distribution including packaging, marketing and sale of beef to supermarkets, the food service industry, butchers and international customers.

Nolan’s core assets include the primary processing facility with an annual capacity of 260,000 head, and a 4000 Standard Cattle Unit licensed feedlot located 65km west of the processing facility.

In making its decision, the ACCC said the two parties overlapped in the supply of fattened cattle and the supply of wholesale and retail beef products to both domestic and export customers.

“The parties also had a vertical relationship, as Hewitt uses Nolan Meats’ primary processing facility to process some of its fattened cattle,” it noted.

However ACCC determined that the acquisition was unlikely to have the effect of substantially lessening competition in any market.

“The parties are not close competitors in the supply of fattened cattle. Hewitt produces and acquires predominantly Organic, grassfed cattle, while Nolan Meats acquires feeder cattle for grain finishing, in its own feedlot and (via) third party-contracted feedlots, to produce grainfed cattle,” it said.

“The parties are not close competitors in the distribution of beef products as Hewitt predominantly supplies Organic grassfed and other ‘high claims’ certified beef products for export (and to limited extent, domestically), while Nolan Meats predominantly supplies beef products for domestic sale (and to a limited extent, for export).

“Post-acquisition, the merged entity would be unlikely to have the ability or incentive to foreclose rival fattened cattle suppliers’ access to primary processing services, as there are multiple alternative primary processing service suppliers available in the relevant region surrounding Nolan Meats’ Gympie processing facility,” ACCC found.