ACCC accepts Metcash decision

Posted by AFN Staff Writers on 6th December 2011

Australian Competition and Consumer Commission (ACCC)’s chairman Rod Sims has announced that the ACCC will not appeal the Full Federal Court’s decision to allow Metcash’s acquisition of the Franklins supermarket business.

In a media statement released today, Mr Sims said that the ACCC took action to block the proposed acquisition by Metcash of the Franklins supermarket business because it considered that such an acquisition was likely to result in a substantial lessening of competition in the wholesale supply of packaged groceries to independent retailers in NSW and the ACT.

The ACCC has said it now accepts that the Federal Court of Australia has ruled that this was not established on the evidence before the court.

Mr Sims noted that the comments by the court relating to what is sometimes referred to as the ‘counterfactual’ analysis, or comparison of the likely future state of competition both with and without the acquisition will continue to be one of the tools available to the ACCC in its assessment of the likely competitive effect of an acquisition.

“Although not conclusively determined by the Full Court on this occasion, the ACCC considers that there is strong judicial support for the view that “likely” means a ‘real chance’. The ACCC will continue to assess the likely competitive effect of an acquisition on the basis of a ‘real chance’ test,” Mr Sims said.