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The Commerce Commission has granted clearance for Woolworths to acquire 100% of Australian food manufacturer Beak & Johnston (B&J) after initially extending the date for a decision by an extra month. 

The decision follows the Australian Competition and Consumer Commission’s (ACCC) verdict on April 9 to approve the proposal. 

In deciding whether to approve the acquisition the commission considered the potential impact on competition in national markets for a range of food products that B&J manufactures. 

This includes slow-cooked meats, chilled and canned soups, chilled and frozen ready-made meals, and pies (which are all different types of convenience or ready meals). 

The business also manufactures private label products for retailers and other food service providers and is a non-exclusive distributor of the ‘Impossible’ meat alternative brand in New Zealand. 

Chairman Dr John Small said the commission was satisfied that the acquisition is unlikely to substantially lessen competition in the New Zealand market. 

“Our investigation found that notwithstanding Woolworths’ significant retail grocery business, the proposed acquisition was unlikely to result in the merged entity refusing to supply Beak & Johnston products to rival grocery retailers, refusing to purchase products from a rival supplier, or doing so on less favourable terms such that it would substantially lessen competition,” Small said. 

“We don’t believe that Woolworths would have the ability or incentive to restrict rival retailers’ access to convenience or ready meals, nor do we consider any attempt to do so would result in a substantial lessening of competition in relevant retail markets.” 

Small also said that rival grocery retailers could still acquire products from alternative suppliers across the relevant categories, whether they are branded B&J products or private label products that it manufactures. 

Commerce Commission chairman Dr John Small said the commission was satisfied that the acquisition is unlikely to substantially lessen competition in the New Zealand market. 

The commission’s deliberation considered whether there was a risk of Woolworths either delisting the products of rival suppliers to B&J or compromising the attractiveness of their products, but decided it would not be a likely scenario as the items in these categories are generally projected to grow. 

Any efforts by Woolworths to compromise the attractiveness of rival suppliers’ products were also unlikely to substantially lessen competition. 

“While we recognise the proposed acquisition may result in Woolworths potentially ranging more Beak & Johnston products, given the limited nature of the range, and the projected growth of the sales of convenience or ready meals, we don’t believe this will be sufficient to cause competitive harm in the market. 

“We saw no evidence to indicate the proposed acquisition would materially change decisions on the ranging, shelf-positioning or pricing of private label and Beak & Johnston-branded products in Woolworths stores in a way that would substantially lessen competition.” 

B&J was founded in 1986 by David Beak, who remains executive chairman, with Shannon O’Connell as the New Zealand business director. 

Woolworths already owns 23% of the Australian sister company, B&J City Kitchen, which it intends to wholly acquire through this deal. 

Woolworths and B&J City Kitchen have been formal partners since December 2017. 

The acquisition will see it wholly acquire the B&J New Zealand business, which operates out of its site in Wiri, South Auckland. 

The New Zealand business currently employs 65 people. 

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.