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ACCC puts brakes on Woolworths' $552m acquisition of food distributor PFD

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The competition watchdog says a proposed merger between Woolworths and a private food distributor could give the supermarket giant too much power, threaten the viability of smaller supermarkets and limit what foods shoppers can buy.

The Australian Consumer and Competition Commission says a $552 million acquisition by Woolworths of privately owned PFD Food Services could give the supermarket giant too much bargaining power and reduce consumer choice.The ACCC is concerned the merger will restrict choice for food manufacturers and lessen competition between independent supermarkets

Woolworths has been trying to acquire a 65 per cent stake in PFD, and its 26 distribution centres, since August. Woolworths and PFD both acquire food and groceries from suppliers such as frozen food manufacturers, dairy processors and manufacturers of pasta and sauces. PFD supplies Woolworths' competitors and the ACCC is concerned an acquisition may lessen competition.

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell wrote to the commission in October to formally oppose the acquisition. She said while Woolworths had benefitted from COVID-19 restrictions, independent food distributors had struggled.

 

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