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10 June 2021

Ombudsman to monitor impact of Woolworths food distribution move

The Australian Small Business and Family Enterprise Ombudsman Bruce Billson says his office will closely monitor Woolworths’ planned acquisition of a controlling stake in PFD Food services (PFD), in regards to the impact it has on small businesses in the sector.

Following the Australian Competition and Consumer Commission’s (ACCC) decision not to oppose Woolworths’ acquisition of 65% of shares in PFD, Mr Billson says small businesses in the food distribution space are understandably concerned.

“The ACCC’s decision not to intervene or impose any conditions on Woolworths’ proposed acquisition of a majority stake in PFD is disappointing,” Mr Billson says.

“The deal is an example of another creeping acquisition by an already dominant player in the food and grocery sector, eating away at the competitive landscape and the footprint of independent businesses.

“In this case it’s the wholesale food distribution channel, which has been one of the few genuinely competitive areas of the food and grocery sector

 “Food and grocery suppliers are concerned about the likely further narrowing of alternatives to supermarkets for their products with the transaction expected to result in Woolworths significantly increasing its presence and influence in wholesale food distribution channels.

“Small and family business food and grocery suppliers will understandably feel one of the truly open doors for their products closed a little today.

“My office has made our concerns about this transaction clear to the ACCC and we note the evidence was not sufficient to support ACCC intervention as it has concluded the deal will not substantially lessen competition.

“Given that much of the concern about this acquisition relates to Woolworths’ influence on the wholesale distribution channel and the impact on food and grocery producers who are already concerned about having too few customer options, I hope the ACCC will join me in keeping a close eye on how this plays out.

“In the meantime, my office welcomes ongoing feedback from small and family business owners and operators in food distribution.”