Small business under threat after ACCC decision

A coalition of industry bodies claim that hundreds of small businesses operating in the food distribution industry are under threat following the ACCC’s decision to approve Woolworths’ acquisition of PFD Food Services (PFD).

The proposed acquisition has caused significant concern within the food distribution sector which typically involves small to medium businesses, many of which are family-owned and based in regional areas around Australia.

Council of Small Business Organisation Australia (COSBOA), the Australasian Convenience and Petroleum Marketers Association (ACAPMA), Independent Food Distributors Australia (IFDA), MGA Independent Retailers (MGA) and Australasian Association of Convenience Stores (AACS) have banded together to express their disappointment at the ACCC’s decision.

The industry organisations say they will continue to fight for members by highlighting any anti-competitive behaviour from Woolworths.

“Given its track record in other sectors,” says IFDA Chairman Richard Hinson, “we know that Woolworths will inevitably misuse its increased market power and this will ultimately cost hundreds of jobs in the food distribution sectors, many of which will be in regional Australia.”

COSBOA Interim CEO Alexi Boyd says damage to the sector as a result of the acquisition will be a matter of ‘when’, not ‘if’.

“It is more important than ever that we continue to work together and stand up for our members as they face yet another threat to their futures through no fault of their own,” he says.

“Every time that another small business in our sector is forced to close, jobs have to be cut, suppliers have fewer distribution choices, or prices go up because of Woolworths’ strongarm tactics, we will highlight it to the ACCC and other interested parties such as local members of Parliament.”

The ACCC has acknowledged that the acquisition will likely lead to changes in the way the wholesale food distribution industry operates.

“Despite these potential changes,” says ACCC Chair Rod Sims, “we concluded that there are several competitors in the wholesale segment with similar market share to PFD and non-price aspects of competition, such as range, quality and service levels are likely to remain an important part of the competitive dynamics. Consequently there is not likely to be a substantial lessening of competition.”

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