Bega Cheese has indicated that its proposed acquisition of certain businesses within the Fonterra Co-operative Group Limited will not go ahead.

The Australian Competition and Consumer Commission (ACCC) confirmed that Bega is not proceeding with its proposal to acquire some of Fonterra’s consumer, food service and dairy ingredients businesses in Oceania, including its Australian businesses.

Bega had previously teamed up with FrieslandCampina NV, a Dutch-based multinational dairy company, to table the proposal.

Fonterra announced last week (Thursday, August 21), that it had agreed the sale of its global consumer and associated businesses to Lactalis for NZ$3.845 billion.

A move which the ACCC said it would not oppose back in mid July.

Bega, which is a dairy and food products company, is headquartered in the town of Bega, New South Wales.

As one of Australia’s largest purchasers of raw milk, it collects 1.3 billion litres of raw milk annually from over 600 farmer supply contracts.

The company employs approximately 3,900 staff across 19 manufacturing sites and corporate offices.

Bega recently announced that in for the full year 2024, it earned $3.52 billion in revenue.

Fonterra is a New Zealand-based dairy co-operative which sources raw milk from approximately 650 Australian farmers in Victoria, Tasmania, and parts of South Australia and New South Wales.

In Australia, Fonterra acquires raw milk and processes it into a range of dairy products as part of its ingredients, consumer and food service businesses.

It's brands include Mainland, Western Star and Perfect Italiano, and it holds a licence to use the Bega brand to sell certain packaged cheese products in Australia.

Following last weeks sale, Fonterra stated that the deal would rise to $4.22 billion if its Bega licenses were included following on going disputes.

During the ACCC's review, the commission had noted that Bega and Fonterra overlap in various parts of the dairy supply chain, including the acquisition of raw milk from dairy farmers, primarily in Victoria and Tasmania.

The processors also overlap during the processing and production of dairy products (including fresh drinking milk, cheese, butter and cream) and dairy ingredients (including milk powders and whey powders).

In addition to that the two companies supply dairy products and dairy ingredients to the same retailers and food service outlets.