ACCC to investigate Woolworths acquisition of PFD Food Services
The competition watchdog has flagged an investigation into Woolworths’ proposed acquisition of PFD Food Services.
The competition watchdog has flagged an investigation into Woolworths’ proposed $552m acquisition of 77-year old PFD Food Services.
The deal announced last month is subject to Australian Competition and Consumer Commission approval and the regulator will look at how the big supermarket operator can leverage its dominance into the adjacent market.
Woolworths is also a big hotel owner and a customer of the Melbourne-based PFD which, as one of the nation’s largest food service providers, distributes fresh seafood, meat, frozen products, dry goods, paper products and cleaning solutions.
PFD’s founders, the Smith family, will retain a 35 per cent stake in the company which started its life in the Melbourne fish markets. Woolworths will also acquire 100 per cent of PFD’s freehold properties, which primarily comprise 26 distribution centres.
PFD is the second biggest player in the food service sector behind BidFoods, with around 12 per cent market share.
The top five companies in the sector control less than 25 per cent of the market but the ACCC investigation will focus on links between the grocery giant, suppliers and adjacent companies like prepared meals provider City Kitchen.
The ACCC is yet to detail a timetable for the investigation but has called for submissions.