The Australian Competition and Consumer Commission will not oppose Metcash Trading Limited's proposed acquisition of Foodland Associated Limited, ACCC Chairman, Mr Graeme Samuel, said today.
Metcash is Australia's largest independent grocery and liquor wholesaler and distributor, operating in Queensland, New South Wales, Victoria, South Australia and the ACT. The IGA brand is controlled by Metcash and is licensed to independent store operators.
FAL operates 81 Action Supermarkets in Western Australia, Queensland, and northern New South Wales. It is also the grocery wholesaler to all Western Australian independent supermarket operators, including its own franchise banner groups Dewsons, Supa Valu, Foodland and Four Square.
Mr Samuel said the proposed acquisition is unlikely to substantially lessen competition in the supermarket industry at the retail level, since there is only a limited geographical overlap (in Queensland and Northern New South Wales), and in those areas where the overlap occurs there will be continued strong competition from the other market participants.
"At the wholesale level there is virtually no overlap, as Metcash does not operate in Western Australia, the only state in which FAL operates as a wholesaler and distributor servicing independent supermarkets".
The ACCC conducted extensive market inquiries during its assessment of the proposed transaction, contacting competitors, suppliers and industry organisations. On the whole, responses indicated little or no concern about the acquisition, with some market participants of the view that it will heighten competition.