Money

What The IGA/Franklins Decision Means

It feels like the battle over whether Franklins can be acquired by IGA’s parent company Metcash has been going on forever, but we finally have a conclusion. Yesterday the Federal Court rejected an appeal by the Australian Competition and Consumer Commission (ACCC) against the deal, meaning it can now go ahead. What does that mean, for shoppers and the ACCC?

Picture by Matthew Rutledge

For shoppers in NSW, where Franklins operates 90 stores, local stores are likely to switch to IGA branding in coming weeks. How much difference that makes to pricing will probably vary from region to region; in my experience, pricing in both Franklins and IGA stores has tended to show more variation than the major supermarkets, which largely set prices on a state-wide basis.

For the ACCC, the decision is unwelcome news, since it appears to restrict its ability to object to takeovers on competitive grounds. So far, it has only issued a brief statement which effectively amounts to “no comment”. The decision is likely to be of particular interest to Foxtel, which is using the Franklins example to argue that its takeover of Austar should be allowed, a move the ACCC has also objected to. A decision on the Austar deal was originally due yesterday, but has been delayed.

Metcash gets all clear for Franklins takeover [ABC News]