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The competition watchdog has raised concerns about rural services group Elders’ (ASX: ELD) proposed $475 million acquisition of Delta Agribusiness, highlighting its potential to lead to higher prices for goods and services to Australian farmers.
While Elders says the deal will benefit agricultural markets, the Australian Competition and Consumer Commission (ACCC) has listed several issues it believes could lessen competition for the agricultural sector in regional communities.
“Competition in the supply of rural merchandise is critical to Australian farmers and our global competitiveness in agricultural products,” says ACCC deputy chair Mick Keogh.
“We have preliminary concerns that the proposed acquisition may lead to higher prices or reduced quality in the supply of rural merchandise without an independent Delta competing with Elders following this proposed acquisition.”
The Adelaide-based Elders and Young-headquartered Delta supply rural merchandise such as agricultural chemicals, seed, fertiliser, animal health products and related services, such as agronomy services, through their retail networks. Both companies also supply rural merchandise to wholesale customers in Western Australia.
When Elders announced the proposed takeover in November last year, Elders said the deal would help fill retail gaps in NSW, north-west Victoria, South Australia and Western Australia, while also enhancing the group's technical expertise and offering in ag tech and precision agriculture.
However, the ACCC says its preliminary view is that the deal is likely to substantially lessen competition in the retail supply of rural merchandise in various markets, including north-west Victoria, the Northern, Central and Great Southern Wheatbelts of Western Australia and the Murray-Mallee regions of South Australia.
The ACCC is also exploring concerns in other local markets where both Delta and Elders have a retail presence, and at a broader geographic level.
Elders supplies rural merchandise through 245 Elders-owned retail stores nationally and also supplies independent stores via its national wholesale business, Australian Independent Rural Retailers. The company also provides agronomic services, livestock and wool agency, real estate, financial, and feed and processing services across Australia.
Founded in 2006, Delta Agribusiness has a network of 64 locations and 40 independent wholesaler customers, and its combined offerings - from fertilisers to seeds to its 4 Season animal health brand – generate annual earnings of about $53 million. Like Elders, the company also provides agronomic services, livestock agency, grain marketing, real estate and financial services.
“Elders and Delta, through their networks of stores, are both significant retail suppliers of rural merchandise in Australia,” says Keogh.
“We are continuing to investigate how closely Elders and Delta retail stores compete with each other, and the extent to which larger retail chains and smaller retailers (or smaller chains) are likely to compete with Elders if the proposed acquisition were to proceed.
“A key issue we are testing is the extent to which having a chain of retail stores assists Delta to compete with Elders more effectively than smaller retailers, both in individual local markets, and across a broader geographic area.”
The ACCC is also considering whether the proposed acquisition will reduce competition at the wholesale level in Western Australia, or whether alternative suppliers would be able to compete with Elders effectively, should it acquire Delta.
The ACCC points out that it has not reached a concluded view on any of the issues outlined.
In a statement to the ASX, Elders notes that the ACCC is seeking more information and industry feedback ahead of making a final decision.
The company says that, in collaboration with Delta, it will “continue to engage constructively with the ACCC” to address the competition issues the regulator has raised.
“Elders remains confident that the transaction will bring benefits to local agricultural markets through the expansion of price-competitive private label options, increased technical expertise and greater product and service offerings for farmers,” says the company.
The ACCC, which is seeking responses from interested parties by 12 June 2025, is expected to make a final decision on the acquisition on 21 August 2025.
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