The future of Woolworths’ bid for 80 of the retail outlets of beleaguered discount chain Franklins is looking increasingly uncertain as deputy Prime Minister John Anderson urged the Australian Competition and Consumer Commission (ACCC) to protect farmers by blocking any deal intended to boost Woolworths’ 37% share of the grocery market.
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While the ACCC mulls the future of 287 retail outlets up for sale by Hong Kong parent Dairy Farm International, Anderson pointed out that Woolworths already enjoys the lion’s share of the grocery sector, adding: “We just want to ensure a framework is in place that maximises the chance for the little guys and the independents.”
Woolworths’ purchase of the stores is still subject to ACCC approval, and concerns have been raised about its fiercely guarded dominance of the market. Its closest rival, Coles Myer, controls another 34% of the sector, leaving little room for other competitors. Anderson spoke of his concerns that with too much power, the supermarket giants can underpay farmers for their produce. This is already the case for the dairy farmers, who argue that the price of milk has collapsed due to retailer pressure since deregulation.
A decision on the Franklins stores is expected from the ACCC within the next fortnight.
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By GlobalData
