September 9, 2011 – 11:44AM
The competition watchdog says it will appeal a federal court judgment which paved the way for grocery wholesaler Metcash to buy the Franklins supermarket business.
The Australian Competition and Consumer Commission (ACCC) will appeal the decision on two grounds, ACCC Chairman Rod Sims said.
“First, because of the adverse effect of the proposed acquisition on independent supermarket retailers, consumers and competition in the NSW and ACT grocery sector,” Mr Sims said.
And second, “if left unchallenged, the court’s interpretation of some fundamental principles of merger analysis could have serious implications for the ACCC’s ability to block anti-competitive mergers and so protect consumers in the future.”
Mr Sims said Metcash, with this proposed acquisition, would be able to increase prices and/or reduce service to independent supermarket retailers.
Following last month’s ruling, Metcash is poised to acquire Franklins’ 80 corporate stores and supply goods to its 10 franchised stores.
The ACCC had attempted to stop the proposed $215 million takeover, arguing Metcash would have an effective monopoly on grocery wholesaling to independent supermarkets in NSW if the deal proceeded.