In November 2019 Kirin-owned Lion announced it had reached an agreement to sell the Lion Dairy & Drinks business to Mengniu.
The AUD $600m ($396m USD) deal includes all white milk, milk-based beverages, yoghurt, juice and water ice brands and assets. This covers brands such as Dairy Farmers, Pura, Dare, Farmers Union, Yoplait, Daily Juice, The Juice Brothers and Berri.
Lion is one of Australasia’s largest food and beverage companies: with Lion Dairy & Drinks being one of four divisions. Its alcohol businesses in Australia and New Zealand and its global Lion Little World Beverages business are not affected by the Dairy & Drinks sale process.
Raw milk processing facilities
The ACCC’s investigation focused on Mengniu’s acquisition of Lion Dairy & Drinks’ raw milk processing facilities as part of the deal.
Two of these are located in Chelsea and Morwell in Victoria. The ACCC’s investigation looked at whether the proposed acquisition would have an impact on competition for the purchase of raw milk from dairy farmers in the Gippsland region (Gippsland is the only area which has processing facilities ultimately owned by both Lion D&D and Mengniu).
Mengniu, through a subsidiary, has an indirect interest in Burra Foods Pty Ltd, which has an existing raw milk processing facility located at Korumburra, Victoria.
However, the ACCC concluded that – while Burra and Lion D&D compete for the acquisition of raw milk – they are not close competitors.