Supermarket chain Woolworths Group has submitted a clearance application to the New Zealand Commerce Commission for the acquisition of 100% shares in food manufacturer Beak & Johnston NZ (BJNZ).
BJNZ is incorporated in Australia and does business in New Zealand and is 100% owned by Beak & Johnston.
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It operates manufacturing facilities in both New Zealand and Australia, producing food products including chilled and frozen ready-to-eat meals, ambient and chilled soups, as well as slow-cooked meats.
These products are distributed to a variety of clients including grocery retailers, wholesalers, food service providers, quick-service restaurants, and other entities.
The company’s product portfolio is marketed under several brand names such as Pitango, Artisano, Ready Chef, Beak & Sons, and Strength Meals Co.
In addition, Beak & Johnston also produces private label items and serves as an importer and distributor for Impossible Foods’ plant-based meat alternatives.
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By GlobalDataWoolworths has been a long-standing client of Beak & Johnston.
In the clearance application, Woolworths said that the acquisition will not trigger any competitive concerns within New Zealand’s markets due to several factors.
Firstly, the activities of the involved parties do not intersect in New Zealand – Woolworths’ subsidiaries in the country are not engaged in relevant manufacturing, and BJNZ lacks a presence in the retail grocery sector.
Secondly, there is no risk of vertical input foreclosure stemming from the acquisition – Woolworths neither possesses the capacity nor the motivation to engage in such practices, whether in whole or part.
Lastly, there is no danger of vertical customer foreclosure; Woolworths is not expected to have the capability or intent to limit or halt WWNZ’s procurement of products from other producers and wholesalers.
Based on these points, Woolworths believes the acquisition is unlikely to significantly reduce competition within any New Zealand market, and therefore, is seeking approval from the commission for the acquisition.
However, the regulatory body has stated that it will approve a merger only if it is convinced that the merger will not lead to a significant reduction in competition within the market.
Woolworths, which is publicly traded on the Australian Stock Exchange, operates an extensive supermarket network in New Zealand under various banners including Woolworths/Countdown and Metro stores.
It also acts as the franchisor for SuperValue and FreshChoice outlets.
The transaction is being conducted by Woolworths in Australia rather than by the unit in New Zealand.
According to the Sale and Purchase Agreement (SPA) dated 9 August 2024, which has already been submitted to the commission, Woolworths will, upon completion, acquire full ownership of Beak & Johnston based in New South Wales.
The Australian Competition and Consumer Commission (ACCC) was notified about the transaction on 9 August 2024.
In September 2024, Woolworths agreed to offload its remaining 4.1% stake in Endeavour Group, the owner of liquor store chain Dan Murphy’s and BWS bottle shops.
