The Australian Competition and Consumer Commission is investigating Woolworths’ proposed buy-out of ready meals company Beak & Johnston Holdings (City Kitchen) on competition, and access and expansion issues for the ready meals market.
Woolworths currently holds a 23 per cent interest in B&J City Kitchen. The acquisition would result in the retailer indirectly owning 100 percent of its Australian and New Zealand business.
City Kitchen manufactures chilled and frozen meals, supplying supermarkets, petrol and convenience stores, food producers and food service operators. Its 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; and
- Pasta Master: Chilled lasagne and pasta ready meals.
Beak & Johnston Pty Ltd (Beak & Johnston Greenacre) does not form part of the proposed acquisition. It supplies sauces, soups, slow-cooked meats, and other chilled ready meals.
The ACCC said it is focused on the impact the deal would have on competition. In particular:
- the closeness of competition between City Kitchen and other manufacturers or wholesalers of ready meals;
- the barriers to entry or expansion in the manufacture or supply of ready meals, and
- whether the proposed acquisition would enable Woolworths to foreclose rival grocery retailers’ access to the supply of ready meals or rival suppliers of ready meals access to grocery retailers.
Submissions on the proposal closed in November. Queries can now be sent to mergers@accc.gov.au.
