ACCC goes to court to head off Metcash challenge

ACCC seeks Federal Court hearing after Metcash launches first serious challenge to its authority since early in the decade

By Rob McKay | November 29, 2010

Metcash has picked up the Australian Competition and Consumer Commission’s (ACCC) legal gauntlet, thrown down last week when the grocery concern said it would go ahead with its proposed takeover of the Franklins chain.

The ACCC had earlier said it would oppose Metcash’s purchase of Franklins from South African grocery firm Pick n Pay on competition grounds.

The ACCC has now sought a Federal Court hearing after the first serious challenge to its authority since early in the decade.

Its decision to oppose had raised the issue of what sphere of competition - whether in the New South Wales wholesale market or amongst national supermarkets - should take precedence, with the ACCC choosing NSW wholesale.

"Metcash is delighted to have the opportunity for the Federal Court to determine whether we can proceed with the transaction," Metcash Chief Executive Andrew Reitzer says.

"We have clearly different views to the ACCC regarding the Australian grocery market and what will ultimately be in the best interests of all consumers.

"We consider that it will be in all parties’ interests for these issues to be authoritatively determined by the Federal Court as soon as possible."

At stake is the future of Franklins, which Pick n Pay believes has only one serious buyer in Metcash, and the form of the supply chain, controlled largely by Metcash, that goes with it.

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