The Australian Competition and Consumer has accepted legally-enforceable undertakings from Dairy Farm Management Services Ltd, Franklins and Woolworths Limited that relate to the sale of Franklins supermarkets, ACCC Chairman, Professor Allan Fels, said today.
The undertakings address the ACCC's concerns that the proposal put to the ACCC by Dairy Farm may result in a substantial lessening of competition in the supermarket industry.
*Professor Fels noted that the undertakings would underpin a significant boost to the market share of independent grocery retailers.
"On the basis of the undertakings negotiated by Dairy Farm, Franklins and Woolworths, the ACCC formed the view that it would not oppose the proposal", he said.
"The undertakings relate to the process by which stores will be transferred from Franklins to independent operators. The aim of Joint Independent Divestiture Alliance is to transfer JIDA stores to independent operators.
Franklins and Dairy Farm undertakings
As a result of the undertakings, Franklins will not allow its 'No Frill's' and 'First Choice' product brands to be used by major supermarket chains other than a non-exclusive right to use the brands for three months in the event that a chain acquires a Franklins store with remaining stock.
Woolworths undertakings
The ACCC has agreed to Woolworths acquiring 67 Franklins stores, half the initial number sought.
Where Woolworths acquires a Franklins store, Woolworths must, within three months of each acquisition remove reference to the store having been a Franklins store and stop selling 'No Frills' and 'First Choice' brands.
To promote competition, Woolworths is required to divest its stores at the following locations: North Strathfield, Newport, Leichhardt, Waterloo, Newtown and Forestville. These stores will continue to operate as Woolworths outlets until sold through an independent broker.
An edited undertaking, including stores which will be made available to Woolworths and JIDA, will be available on the ACCC website, www.accc.gov.au.
Further information
Professor Allan Fels, Chairman, (02) 6243 1129 or pager (02) 6285 6170
Mr Mark Pearson, General Manager, Mergers and Asset Sales, ACCC, (02) 6243 1276
Ms Lin Enright, Director, Public Relations, (02) 6243 1108 or (0414) 613 520
MR 129/01
7 June 2001
*See media release ACCC Reaches In-Principle Agreement in Relation to the Sale of Franklins Stores, MR 120/01 22 May 2001