Metcash in court over Franklins buy plan
METCASH Ltd will have an effective monopoly on grocery wholesaling to independent supermarkets in NSW if it’s allowed to buy Franklins, a court has been told.
The Australian Competition and Consumer Commission yesterday made its opening submissions to the Federal Court in Sydney as it tries to prevent Metcash from buying Franklins, its closest wholesale rival.
The consumer watchdog opposed the transaction after Franklins’ parent company, Pick n Pay Stores Ltd of South Africa, announced last July it had decided to sell Franklins to Metcash for $ 215 million.
Barrister Norman O’Bryan, acting for the ACCC, told the court the proposed purchase would result in ‘‘ substantial lessening of competition’’ by removing Metcash’s closest competitor for the wholesale supply of packaged groceries in NSW and the ACT.
Mr O’Bryan said Metcash was far and away the largest independent wholesaler in Australia’s most populous state.
It supplied independent retailers with 29,000 different products, while Franklins stocks 18,000 and the next nearest competitor, SPAR, stocks 14,000, he said.
One of the key issues for judge Arthur Emmett to decide centres on the definition of the market in which Metcash and Franklins operate, Mr O’Bryan said.