The ACCC will not oppose Metcash’s proposed acquisition of wholesale food distributor Superior Food Services.
The competition regulator’s review focused on:
- How closely Metcash and Superior compete in the wholesale supply of food products to foodservice customers,
- How the acquisition may affect suppliers or increase Metcash and Superior’s buyer power
- The likely impact of the acquisition on prices, product range and quality
“We conducted extensive market inquiries with customers, suppliers, competitors and industry associations. We ultimately found that the transaction would not be likely to substantially lessen competition,” says ACCC Commissioner Stephen Ridgeway.
Although both Metcash and Superior supply food products, market feedback indicates that they don’t compete closely for customers.
Superior primarily sells and distributes products that aren’t suitable for direct retail sale, and Metcash doesn’t have the product base to compete in any significant way for foodservice customers.
The merged entity will continue to be constrained in the supply of foodservice products by established competitors such as Woolworths-PFD Food Services and Bidfood.
“We found that Metcash and Superior make up a very small percentage of the overall demand from food suppliers, and that suppliers would continue to have many other alternative routes to market,” says Mr Ridgeway.
Commenting on the proposed acquisition in February, Metcash Group CEO Doug Jones said Metcash is the “logical” owner of Superior, and the acquisition “cements our position as the largest wholesaler and distributor of food to independent businesses in Australia”.
“Superior Food provides a compelling opportunity to expand in an attractive and adjacent growth market through an industry leading player with an established national platform for future growth,” he continued.
“The combination of the two businesses unlocks diversification benefits, procurement savings, range expansion and extends our purpose of ‘Championing successful independents’.”