Metcash, ACCC court case begins

Published on Mon, 14/03/2011, 01:45:21

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After months of preparation, Metcash will be able to finally put forward its case in the Federal Court as to why it should be allowed to acquire the Franklins supermarket chain from Pick n Pay Retailers.

The company said in a statement that it “is pleased to have the opportunity to put its case in support of the transaction to the court”.

"There are several very important issues on which the court will be asked to rule, including the definition of the Australian grocery market."

This comes after Australian Competition and Consumer Commission (ACCC) was seeking to block Metcash from the transaction, which involves acquiring 79 corporate stores, 10 franchised stores plus all Franklins stores in NSW for approximately $215 million.

According to Metcash, in its case, it will argue that its objective for purchasing Franklins is to ensure that there is a strong third competitor in the Australian grocery market.

“This independent network would significantly improve its competitive position against the national chains in Australia’s largest grocery market, NSW, while growing the market share of Metcash supplied retailers in the state from 11 per cent to 17 per cent. Meanwhile, the independent network’s national share would rise from 19.8 per cent to around 21 per cent,” it said.

The hearing, before Justice Emmett, is expected to take two weeks.
 


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