Regulator blocks Anacacia exit of Rafferty’s to Heinz
Anacacia Capital’s sale of baby-food producer Rafferty’s Garden to H.J. Heinz has been blocked by the Australian Competition and Consumer Association (ACCC). The regulator decided that the transaction would give Heinz an unfairly dominant market position.
"The proposed acquisition would combine the two largest suppliers of wet and dry infant food in Australia, resulting in highly concentrated markets where barriers to entry and expansion are high, particularly because of brand recognition and preference, said Rod Sims, chairman of the ACCC. "This is likely to reduce the frequency and depth of promotional activity, increase prices and reduce innovation in the wet and dry infant food markets."
The ACCC said it would publish a public competition assessment in due course. It invited industry participants to make submissions from the end of October last year with a view to delivering a verdict in early December, but the deadline was pushed back several times.
Rafferty's claims to be the second-largest baby-food business in Australia with a 30% market share. According to the ACCC, it has a 32% share of the wet infant food segment and a 23% share of the dry infant food segment. Heinz controls about 46% of the market in each area and no other industry participant has more than 10%.
Anacacia completed the buyout of Rafferty's in 2010 alongside SalesLink Australasia, investing via its A$50 million ($51 million) debut fund. The private equity firm is currently raising its second fund, with a target of up to A$150 million.
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