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UPDATE 1-Aussie regulator says Woolworths to address competition concerns from PFD deal

05/10/2021 20:19
UPDATE 1-Aussie regulator says Woolworths to address competition concerns from PFD deal

Adds details on ACCC consultation, Woolworths statement

- Australian grocer Woolworths Group Ltd WOW.AX has offered draft commitments to ensure its deal to buy two-thirds of PFD Food Services will not hurt competition in the food sector, the country's competition regulator said on Tuesday.

Woolworths and PFD have offered to maintain "a degree of separation and independence" for three years after the deal, unless some early termination clauses are triggered, the Australian Competition and Consumer Commission (ACCC) said.

The companies indicated that the move would "preserve the current market dynamics and enable market participants, such as independent suppliers, to continue to do business with Woolworths and PFD independently," ACCC Chairman Rod Sims said.

The proposed measures will also place obligations on PFD's board and governance structure, and impose confidentiality protocols regarding certain supplier information, the ACCC said.

The regulator had said in December that the deal by the nation's biggest grocer may increase the company's already "substantial" bargaining power in dealing with food manufacturers. nL1N2IU2UE

The ACCC will consult with market participants on the proposed undertakings until May 19 and make a final decision on the deal on June 10, it said. nGLF6cjT2p

A Woolworths spokesperson said the company was pleased that the ACCC was consulting with relevant stakeholders on the matter.

"We continue to submit to the ACCC that the proposed partnership will give rise to no substantive competition concerns irrespective of the undertaking we have offered," the spokesperson said.

(Reporting by Shashwat Awasthi in Bengaluru; Editing by Rashmi Aich)

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