The federal court has dismissed the Australian Competition and Consumer Commission’s (ACCC) application to prevent Metcash from acquiring the Franklins supermarket chain from Pick ‘n Pay Retailers.
This means Metcash is now free to acquire 80 Franklins corporate store plus 10 franchised stores, all of which are located in NSW.
On the other hand, the ACCC chairman Rodd Sims said he is “disappointed” by the ruling.
"The role of the ACCC is to oppose mergers where we believe there will be a substantial lessening of competition in a market in Australia, and this will not change," he said.
"The ACCC's role in this area is important to avoid inappropriate market concentration and to protect the long-term interests of consumers."
The ACCC commenced proceedings seeking an injunction against Metcash and Franklins' parent company, Pick n Pay on 8 December 2010 on the basis that the proposed acquisition would substantially lessen competition in breach of the Trade Practices Act 1974.
Central to the ACCC's concerns was that the proposed acquisition is likely to result in a substantial lessening of competition through the removal of Metcash's closest and only genuine competitor for the wholesale supply of packaged groceries in NSW.