Regulator 'knew of bid to challenge Metcash'

A cloud lifted on Pick n Pay's troubled bid to sell its Franklins stores to Australian retailer Metcash last week when evidence emerged in court that the regulator, despite opposing the sale on the grounds it would harm competition, knew all about a rival's bid to set up a wholesale operation to challenge Metcash.

By Michael Bleby

22 Mar 2011

Members of the Australian Consumer and Competition Commission (ACCC), challenging the proposed R1,4bn transaction in the Federal Court in Sydney, were present at a meeting in December at which retailer Woolworths, unrelated to the South African company of the same name, discussed starting a wholesale operation, it emerged in cross-examination last week.

This flies in the face of the regulator's case that Woolworths and Coles, Australia's two largest retailers, did not distribute to independent grocers.

Pick n Pay and Metcash, also unrelated to the South African company, argue that the 80-odd Franklins stores compete with Coles and Woolworths and that blocking the sale would harm competition.

On Friday, 18 March 2011, counsel for Metcash called for the case to be thrown out. "We wish to make a submission that the ACCC has not only opened the case on a false basis but that it was false to the knowledge of at least two officers of the commission and possibly more," advocate Justin Gleeson said, according to the Sydney Morning Herald.

Yesterday, 21 March, the ACCC denied deliberately withholding information material to the case.

Woolworths "was only interested in getting its hands on some Franklins stores" and was not interested in being a "long-term" wholesaler to independents, said Tim Grimwade, the commission's GM for mergers and acquisitions, the newspaper reported. Pick n Pay declined to comment.

Source: Business Day

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