B&J City Kitchen Pty Ltd - Jewel Fine Foods business and assets held by the entities set out below

Acquirer(s)

  • B&J City Kitchen Pty Ltd

Target(s)

  • Jewel Fine Foods business and assets held by the entities set out below

Summary

B&J City Kitchen Pty Ltd proposes to acquire the Jewel Fine Foods business and assets from the following entities:

  • Jewel of India Holdings Pty Ltd (Administrators Appointed)
  • Jewel of India Enterprises Pty Limited (Administrators Appointed)
  • Jewel International Foods Pty Ltd (Administrators Appointed) as trustee for Jewel International Foods Unit Trust
  • Jewel Fine Foods Pty Ltd (Administrators Appointed)
  • Jewel of India Admin Pty Ltd (Administrators Appointed)
  • Jewel Equipment Pty Ltd (Administrators Appointed)
  • Jewel Properties (Aust) Pty Ltd (Administrators Appointed) as trustee for Matta Family Trust
  • Jewel of India Retail Pty Ltd (Administrators Appointed)
  • Gardeners Nominees Pty Ltd (Administrators Appointed)

 

Market definition

The ACCC considered the potential effect of the proposed acquisition on competition in Australia for the:

  • wholesale supply of chilled ready meals
  • retail supply of chilled ready meals.

The ACCC considered how closely chilled ready meals compete with other types of ready meals and ready to eat food, and found that the appropriate approach in this case was to view chilled ready meals as a distinct product market.

Competition analysis

B&J City Kitchen Pty Ltd (B&JCK) and Jewel Fine Foods (Jewel) are the two largest producers of chilled ready meals in Australia. At present they are the two largest manufacturers of chilled ready meals that can meet the requirements of the major retailers, in terms of scale, range, quality, reliability and price.

There are other manufacturers of chilled ready meals. However, they have not supplied the same volumes as B&JCK and Jewel.

The ACCC found that alternative suppliers are untested in their ability to produce the volumes, range and quality and price required by the major retailers. For these reasons the ACCC considered that the level of constraint currently imposed by alternative suppliers on Jewel and B&JCK is relatively low.

The ACCC considered that the proposed acquisition would act to concentrate the two largest suppliers with demonstrated experience and track records in manufacturing a broad range of chilled ready meals. While there may be scope for alternative suppliers to scale up and develop their experience and track records, their ability to do so in the short to medium term is uncertain.

Jewel was under administration at the time of the decision, however, the ACCC considered that if the acquisition by B&JCK did not proceed it was likely that the business would be sold to somebody else.

The ACCC considered that some of the major retailers have a degree of countervailing power. However, it would take time and involve costs for alternative suppliers to scale up to the production levels, quality and reliability required.

A more detailed Public Competition Assessment will be published in due course. 

Market inquiries

Document title Date

Timeline

DateEvent
29/07/2019ACCC commenced informal review under the Informal Merger Review Process Guidelines.
05/08/2019Closing date for submissions.
29/08/2019Former provisional date for announcement of ACCC’s findings (19/09/2019) is brought forward due to the operational circumstances of Jewel.
05/09/2019ACCC announced that it opposed the proposed acquisition.