Suggestions of a behavioural undertaking put forward by Woolworths in an attempt to secure its acquisition of PFD Food Services have been slammed by industry groups, which called it a “watershed moment” for the local retail sector.
The Australian Convenience and Petroleum Marketers Association, Small Business Organisations Australia, Independent Food Distributors Australia, Master Grocers Association and Australasian Association of Convenience Stores urged the ACCC to listen to Australia’s small business community and deny Woolworth’s play at the distribution sector.
The supermarket group’s proposed terms, such as keeping trading terms confidential between PFD and its own supermarket buyers, do little to address the concerns of the industry it is attempting to enter, the group said.
“Woolworths’ latest undertakings to the ACCC to keep supplier and customer information confidential, as part of its bid to acquire PFD Foods, are yet another smokescreen to steamroll both small business and the ACCC,” said COSBOA chief executive Peter Strong.
“We remain extremely concerned about the inevitable negative impact of this proposed merger on businesses in the food supply chain, from growers, to manufacturers, distributors, food service retailers and independent grocers and, ultimately, Australian consumers.”
The group partnered in February to block the acquisition, stating it would grant the company inordinate influence over the food sector in Australia.
Woolworths is already one half of the most powerful duopoly in the country, sharing the supermarket sector with industry rival Coles.
“There is no doubt in the minds of industry peak bodies that Woolworths has a clear strategy to further pressure suppliers, cross-subsidise operational and technology investment, commercialise customer data and savagely reduce costs in order to streamline PFD’s existing supply,” said MGA independent retailers chief executive Jos de Bruin.
The ACCC has already committed itself to a formal review of the proposed takeover, which would see Woolworths acquire 65 per cent of PFD, and has asked for industry feedback to help guide its review.
Woolworths has previously said it is confident it can address the concerns of industry parties and will ultimately receive a green light from the ACCC.
“We see no reduction in competition, in any relevant markets, from our proposed partnership with PFD,” Woolworths Group chief executive Brad Banducci said in a statement.