The ACCC is reviewing Woolworths’ proposed acquisition of PFD Food Services.

The watchdog yesterday announced it had commenced a review under the Informal Merger Review Process Guidelines.

The retailer last month outlined plans to acquire a 65% stake in PFD Food Services in a $552 deal, which would see it extend its strategic partnership with the foodservice network and acquire 26 freehold properties currently being used as distribution centres by PFD.

PFD is a wholesale food distribution business, suppling QSRs and commercial food service businesses such as P&C outlets, airlines, restaurants/cafes, hotels, institutions and supermarkets. Current owners, the Smith family, would retain a 35% holding in PFD under the arrangement.

The ACCC will focus on the impact this will pose to competition, as well as if any wholesale suppliers of food and groceries are currently of similar size and scope to PFD and whether the acquisition would bolster Woolworths’ position as a wholesale buyer of food.

Under the Consumer ACT 2010, acquisitions may be prohibited it they are deemed likely to substantially lessen competition in the market.

As part of the review, the ACCC is inviting interested parties to lodge submissions on the proposal by October 9, which it will take into consideration before announcing a determination in December.

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