Clearly our prediction that all Franklins stores would soon be rebranded as IGA was a little premature. The Australian Competition and Consumer Commission (ACCC) just announced it is going to appeal the Federal Court decision which said that Franklins could be sold off to Metcash despite ACCC objections, and it looks like the Foxtel/Austar merger is a factor.
In its press release announcing its intentions, the ACCC makes it clear that one of its main reasons for appealing is to ensure that it can continue in its role of examining the potential effects of mergers. Chairman Rod Sims said:
The ACCC is appealing because, if left unchallenged, the Court’s interpretation of some fundamental principles of merger analysis could have serious implications for the ACCC’s ability to block anti-competitive mergers and so protect consumers in the future.
The obvious current case this applies to is the Foxtel/Austar merger, which the ACCC has objected to on the grounds that it will substantially reduce competition in the pay TV sector and reduce choice for consumers in the future. When the Franklins decision was made, many business analysts predicted that Foxtel would use the case to argue that the ACCC’s approach to its merger plan was also unfair. I expect that will still happen, but the landscape is clearly going to be tangled for a while. In the meantime, you can still stock up on No Frills goods a little while longer.