Aussie Cold Storage Deal Gets the Green Light

cold storage

The Australian Competition & Consumer Commission (ACCC) has announced it will not oppose the proposed acquisition of the Oxford cold storage business by Emergent Cold.

Emergent Cold and Oxford are two significant suppliers of third party cold storage services in Victoria. The buying company operates cold storage facilities around Australia and overseas, including five sites in Victoria. Oxford only operates locally, as it has a site in Laverton North.

“The proposed acquisition raised preliminary concerns for the ACCC, but after closely considering further information received from the market and the parties, our view is that the deal is unlikely to substantially lessen competition. Some market participants were worried that Emergent Cold was removing its closest competitor and would gain control of almost 40% of third-party cold storage capacity in Victory. The ACCC took these concerns seriously,” explained ACCC Commissioner Stephen Ridgeway.

There are two other large suppliers of cold storage services in Victoria, New Cold and Americold, both of which are part of the multi-national cold storage business. Other competitors include AHG Refrigerated Logistics, Linfox, and numerous small businesses.

“The ACCC ultimately found that, although there are some differences between how existing cold storage suppliers operate, the combined Emergent Cold-Oxford is still likely to face close competition in Victoria from a range of large and small alternative suppliers, Ridgeway further noted.

The ACCC also took into account the potential for competing Victorian cold storage suppliers to expand and build new capacity in response to demand in the coming years, including the ability of some larger customers to sponsor such expansion if required.

Additionally, the ACCC considered the possibility that increases in the price of third party cold storage services may lead to some larger customers providing their cold storage services in house in the future.

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