Woolworths has received the go-ahead from the Australian competition regulator to proceed with its proposed acquisition of Beak & Johnston.
The Australian Competition and Consumer Commission (ACCC) said today (9 April) it “will not oppose” the deal.
The acquisition involves Australian grocer Woolworths purchasing the 77% interest in B&J City Kitchen Pty and Alors Holdings Pty that it does not currently own, along with 100% of Beak & Johnston NZ Pty.
However, Beak & Johnston’s Greenacre unit, which supplies sauces, soups, slow-cooked meats, and other chilled ready meals, is not part of the acquisition.
Beak & Johnston operates manufacturing facilities in Australia and New Zealand, producing chilled and frozen food.
The company markets its products under brands including Pitango, Artisano, Ready Chef, Beak & Sons and Strength Meals Co. It also produces private-label items.
The ACCC reviewed whether the acquisition could lead Woolworths – Australia’s largest food retailer – to prioritise Beak & Johnston’s products over those of rival suppliers, potentially harming competition in the ready meals segment.
Its investigation found that several large ready meal suppliers with comparable capabilities to Beak & Johnston would remain in the market, including some that do not supply Woolworths.
Additionally, smaller producers offer products “for niche product segments”, the regulator added.
ACCC Commissioner Dr Philip Williams said: “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.
“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 (NZCC) is assessing a similar clearance application submitted by Woolworths in January.
In February, the NZCC published the statement of preliminary issues regarding the acquisition.
An anonymous stakeholder expressed apprehension the deal could “substantially lessen competition” in the wholesale and retail markets across various food types such as slow-cooked meats, chilled soups, and plant-based meat alternatives.
The ACCC’s statement today noted the NZCC is considering a clearance application related to Woolworths’ proposed acquisition of Beak & Johnston.
