Woolworths has secured clearance from the consumer watchdog for its proposed acquisition of food manufacturer Beak and Johnston Holdings Pty Ltd.
Currently, Woolworths owns a 23 per cent interest in Beak and Johnston’s subsidiary B&J City Kitchen Pty Ltd.
The Australian Competition and Consumer Commission (ACCC) said that based on its investigation, the acquisition is less likely to significantly lessen competition as rival retailers will still have options for sourcing quality ready meals.
The proposal involves Woolworths fully acquiring Beak and Johnston’s subsidiaries including Beak & Johnston NZ Pty Ltd.
A separate Beak and Johnston subsidiary which manufactures sauces, soups and slow-cooked meats at its Greenacre, NSW facility, will not be part of the acquisition.
“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,” Philip Williams, ACCC Commissioner, said.
“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 food service wholesaling and direct-to-consumer models.”
The New Zealand Commerce Commission is also considering a clearance application related to the proposed acquisition.