The competition watchdog has raised concerns over supermarket giant Woolworths' acquisition of food distributor PFD, dismissing commitments from the business that the tie-up would not cause competition issues.
Woolworths is planning to acquire 65 per cent of the business from the founding Smith family, who will retain a 35 per cent stake, as part of a broader plan to expand the retailer's operations beyond the supermarket and drinks space. "It's essentially behavioural and very hard to monitor in a strict legal sense. There's a whole range of companies who could buy one another but say 'we'll run them completely separate, don't worry about it'," he said."We can't be operating on that basis. I'm not questioning the integrity behind the statement, I'm just saying it's not something that is appropriate to rely on because we just would find it so hard to monitor.
"[Suppliers are concerned] Woolworths could impose supplier terms that are the same as the ones paid when you supply the supermarket," Mr Sims said. "Most food manufacturers would earn more from PFD than they would from Woolworths."