The Australian Competition and Consumer Commission (ACCC) has expressed its concerns about Metcash’s proposed acquisition of the Franklins’ 85 supermarkets.

In a statement of issue, the ACCC said the deal may lessen the competition of supplying groceries to independent retailers.

Metcash supplies and distributes groceries and liquor to independent and franchise grocery retailers throughout Australia through its wholesale and distribution business, which includes IGA Distribution and IGA Fresh.

In order to assess the situation, the ACCC has invited further submissions from the market in response to its statement of issue by 15 October 2010.

The competition regulator will conduct market inquiries by looking at the competition for the wholesale supply of products sold in supermarkets; competition for procurement of products sold in supermarkets; and local retail competition between supermarkets.

The ACCC has deferred its final decision until 11 November 2010.