Met­cash in court over Franklins buy plan

Townsville Bulletin - - Investor - Townsville Bul­letin

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.

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