The ACCC will not oppose Woolworths’ acquisition of ready meal company, Beak & Johnston (B&J). The commission found the deal would not disadvantage rival ready meal producers as there were other retailers and channels they could access.
Woolworths currently holds a 23 per cent interest in B&J City Kitchen, a subsidiary of B&J that manufactures ready meals and pastries for wholesale and retail sale.
The acquisition includes all of B&J’s subsidiaries and Beak & Johnston NZ. The ACCC said the New Zealand Commerce Commission (NZCC) is also considering a clearance application from Woolworths for its proposed acquisition of B&J.
The brands include:
- Strength Meals Co: Chilled and frozen ready meals
- Simmone Logue: Gourmet pies, pastries, and cakes
- Pitango: Soups and other meals
- Artisano: Soups, sauces, and other meals
- Pasta Master: Chilled lasagne and pasta-based ready meals.
ACCC Commissioner Dr Philip Williams said the commission looked at how rival ready meal companies could be effected by the deal, primarily whether they could remain competitive even if Woolworths only stocked or otherwise advantaged B&J’s products.
“Our investigation found that while Woolworths has significant bargaining power in its dealings with ready meal suppliers, in this case it was unlikely the acquisition would have a substantial anti-competitive effect.
“Rival suppliers of ready meals will continue to have access to other supermarkets and convenience stores. Ready meal suppliers can also distribute through other channels, such as food service wholesaling and direct-to-consumer models,” Williams said.
The ACCC also investigated whether Woolworths would have the incentive to prevent the supply of B&J products to rival retailers and any associated impact on competition.
It found there were several large competing ready meals suppliers of similar scale and capabilities that currently don’t supply Woolworths as well as smaller suppliers with premium products for more niche product segments.
“Rival retailers will continue to have options for sourcing quality ready meals to suit a variety of consumer preferences. Ultimately, we did not find that the proposed acquisition is likely to substantially lessen competition in any market,” Williams said.
