Woolworths’ acquisition of Beak & Johnston not opposed

The ACCC will not oppose Woolworths Group’s proposed acquisition of Beak & Johnston (B&J).

Woolworths currently holds a minority 23% interest in B&J City Kitchen, a subsidiary of B&J which manufactures ready meals and pastries for wholesale and retail sale.

The proposed acquisition will result in Woolworths ultimately owning 100% of B&J’s subsidiaries, including Beak & Johnston NZ. The New Zealand Commerce Commission (NZCC) is also considering a clearance application from Woolworths for its proposed acquisition of B&J.

The ACCC considered whether rival ready meal producers to B&J could continue to maintain competitively effective operations even if Woolworths only stocked or otherwise advantaged B&J’s products.

“Our investigation found that while Woolworths has significant bargaining power in its dealings with ready meal suppliers, in this case it was unlikely the acquisition would have a substantial anti-competitive effect,” says ACCC Commissioner Dr Philip Williams.

“Rival suppliers of ready meals will continue to have access to other supermarkets and convenience stores. Ready meal suppliers can also distribute through other channels, such as foodservice wholesaling and direct-to-consumer models.”

The ACCC also investigated whether Woolworths would have the incentive to prevent the supply of B&J products to rival retailers and any associated impact on competition.

The review found that there are a number of large competing suppliers of ready meals with similar scale and capabilities to B&J, including some that don’t currently supply to Woolworths. There are also several smaller suppliers offering high quality products for niche product segments.

“Rival retailers will continue to have options for sourcing quality ready meals to suit a variety of consumer preferences,” says Mr Williams.

“Ultimately, we did not find that the proposed acquisition is likely to substantially lessen competition in any market.”