Woolworths’ $550 million merger plan may need work: ACCC

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Australia’s competition watchdog is calling for industry feedback on a proposed deal between Woolworths and food services company PFD | domp

A pitch from supermarket giant Woolworths to allay competition concerns over its $550 million acquisition of food services company PFD has raised eyebrows with competition tsar Rod Sims who says similar plans have been difficult to enforce.

The regulator said the undertaking was behavioural in nature, rather than requiring Woolworths and PFD to take certain actions. These sorts of undertakings have been historically difficult to enforce, Mr Sims said. “There’s this question of how do you monitor them? If there are three Woolworths people on the PFD board, how do you monitor that successfully? We’ve certainly had issues with behavioural undertakings,” he said.

PFD would also be required to implement a charter when dealing with suppliers requiring the business to act in good faith and with confidentiality, in line with the Food and Grocery Code of Conduct. This requirement would be in place for five years.

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