The Australian Competition and Consumer Commission (ACCC) has released a statement about yesterday’s Federal Court decision to allow Metcash to acquire Franklins, unsurprisingly referring to the decision as “disappointing,” whilst consumer group Choice has cautiously welcomed the win.
Chairman Rod Sims said the watchdog commenced proceedings against Metcash and Franklins’ South African parent company Pick n Pay in December last year, on the basis the acquisition would lessen competition in the wholesale grocery industry.
In Justice Arthur Emmett’s initial judgement summary, he said he believed it’s likely the acquisition will better allow independent retailers to compete with major supermarket chains.
Sims said the ACCC hasn’t had opportunity to consider the Federal Court’s judgement, as its reasons had only just been made available to legal representatives and would likely be made public this afternoon.
After this time, the watchdog said it will closely examine the judgement and consider whether to appeal the decision.
“The role of the ACCC is to oppose mergers where we believe there will be a substantial lessening of competition in a market in Australia, and this will not change,” Sims added.
Meanwhile, Choice is carefully welcoming the decision, with spokeswoman Ingrid Just telling AAP that if Metcash is looking to establish a viable alternative to Coles and Woolworths, consumers will only benefit.
“It’s early days and we don’t know if there is going to be an appeal process. But it comes down to what Metcash decides to do with Franklins to make them a real competitor in the space.”
According to Just, local consumers have significantly fewer supermarket options in comparison with other countries.
“What there really needs to be is more competition in this sector, so at the end of the day if Metcash is able to provide an alternative to the two big players that can compete on the product range, on the price, on the customer service level and convenience, then the consumers will have greater choice.”
