George Weston Foods Limited - acquisition of the smallgoods business 'Globe Meats' from the Craig Mostyn Group.

Summary

George Weston Foods Limited's acquisition of the smallgoods business 'Globe Meats' from the Craig Mostyn Group.

Market definition

The effect of the Acquisition was examined in the following markets:
(a) the Western Australian pig acquisition market; and
(b) the national smallgoods market.

Competition analysis

In August 2005 the ACCC decided not to oppose the acquisition by George Weston Foods Ltd of the smallgoods business Globe Meats from the Craig Mostyn Group, pursuant to section 50 of the Trade Practices Act 1974.

In reaching this conclusion, the ACCC investigated the effect of the acquisition on the pig acquisition market in Western Australia. The ACCC formed the view that the effect on competition would be negligible given that the Craig Mostyn Group would continue to compete in this market to meet its fresh pork needs.

The ACCC also investigated the effect of the acquisition on the national smallgoods market and concluded there would be no substantial lessening of competition, based on the following factors:
* there would only be a 1.1% increase in George Weston Foods Ltd's market share;
* barriers to entry and expansion in this market are reasonably low given that set-up costs are not sunk;
* supermarkets possess a high degree of countervailing power; and
* there are a wide-range of substitute brands and products available.

Merger type

Horizontal

Initiation

Parties