DLF Seeds’ acquisition of PGG Wrightson Seeds not opposed

14 February 2019

The ACCC has decided that it will not oppose DLF Seeds’ proposed acquisition of PGG Wrightson Seeds.

DLF Seeds and PGG Wrightson Seeds are active in Australia in the production and supply of forage seeds, which are used for grazing livestock, and turf seeds.

“Following its investigation, the ACCC found that it is unlikely that the proposed acquisition will result in a substantial lessening of competition in any market,” ACCC Deputy Chair Mick Keogh said.

The ACCC’s investigation focussed on competition in the market for a specialised product in which both companies are active: the market for perennial ryegrass seeds containing fungi, called endophytes. 

“The ACCC believes that a combined DLF Seeds/PGG Wrightson Seeds will continue to face competition from remaining suppliers, including large global seed producers such as Heritage Seeds.”

“Most farms which undertake high intensity grazing sow their pastures with a variety of forage grasses, and do not rely solely on perennial ryegrass incorporating novel endophytes,” Mr Keogh said.

The ACCC also assessed whether a reduction in competition would have negative impacts on seed research and development (R&D).

“Seed R&D is a constantly evolving process, and producers continually seek out new ryegrass seed products with improved forage qualities,” Mr Keogh said.

“We did not consider that the proposed acquisition would be likely to lessen competition in R&D aimed at developing new seeds.”

Further information is available at DLF Seeds’ - proposed acquisition of PGG Wrightson Seeds.

Background

Forage seeds are used for grazing, silage and hay production for grazing livestock.

DLF Seeds A/S is a Danish company which deals in forage and turf seeds and other crops. DLF Seeds does not have a business presence or operation in Australia, however its seed products are imported and distributed throughout Australia via third party distributors.

PGG Wrightson Seeds Holdings Limited is a subsidiary of PGG Wrightson Limited, a New Zealand-based public seed company that develops, breeds, and supplies seeds in both Australia and New Zealand, and exports to other international markets.

High intensity grazing applications, such as dairy farming, require grass varieties with specific qualities, such as high dry matter yield, strong nutritive value, and good palatability for livestock. Ryegrass best provides these qualities and is therefore commonly used in the Australian dairy grazing industry.

Endophytes are fungi which live between plant cells. Endophytes protect the host plant by releasing toxins which can deter pests. Standard endophytes are naturally occurring. Novel endophytes are endophytes which have been developed separately to the grass plant, and are then bred into the plant by researchers and grass suppliers.

Release number: 
17/19
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