The competition watchdog has this afternoon advised that it will oppose the proposed combination of Australia’s second and third largest chicken producers.

A takeover of Bartter Enterprises by Baiada, which currently has around 2,200 employees, would have seen the combined company claim top spot from Inghams.

Bartter Enterprises, the owner of the Steggles brand and employer of over 4,500, is the second largest producer and marketer of chicken and turkey products in Australia. Inghams – with over 7,000 employees – is the largest, with Baiada the third largest producer of chicken products in Australia. Together, the three companies hold around 65 per cent of the Australian market.

“The ACCC concluded that the acquisition of Bartter enterprises would be likely to substantially lessen competition in the markets for the supply of processed chicken meat,” ACCC Chairman, Mr Graeme Samuel, said today. “The ACCC conducted extensive inquiries, including with customers, competitors, and chicken growers.”

Fast food restaurants comprise a large group of customers that are heavily reliant upon the three national processors for the supply of high volumes of processed chicken meat. The ACCC concluded that the smaller processors face high barriers to expansion and, as such, are unlikely to be capable of imposing an effective competitive constraint upon the merged entity.

“The merger would be likely to result in a substantial lessening of competition, with effects on prices for the fast food restaurants and their consumers,” the ACCC added in a statement, noting that this would contravene Section 50 of the Trade Practices Act.

A Public Competition Assessment will be available in due course on the ACCC’s website.

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