Coles’ acquisition of Jewel Fine Foods gets green light from ACCC
Australia’s competition watchdog, the ACCC, will not oppose Coles Group’s acquisition of ready meals business Jewel Fine Foods, through its subsidiary Chef Fresh Pty Ltd.
The Sydney-based business, which has been in voluntary administration since April 2019, manufactures branded and private-label chilled ready meals.
Jewel is a major supplier to Coles, with products in its Fresh Convenience Range, including ready-to-heat meals such as pastas, Italian, Asian and Indian dishes. It also has supply arrangements with other major retailers nationally.
The watchdog investigated whether the acquisition would lessen competition in the market but was satisfied that found that there will still be two major suppliers of chilled ready meals in the market, the other being B&J City Kitchen, which has a supply arrangement with rival supermarket Woolworths.
In September 2019, the ACCC opposed the sale of Jewel to B&J City Kitchen due to concerns that the merger could substantially lessen competition for the supply of chilled ready meals.
“Coles’ acquisition of Jewel ensures that there will still be two major suppliers of chilled ready meals,” ACCC Commissioner Stephen Ridgeway said.
“We are pleased that the administration process will end with Jewel’s business continuing as a going concern and competing with other suppliers.”
Ridgeway said the investigation focused on whether other retailers would be foreclosed if Coles acquired the business.
“We found that Woolworths already has supply arrangements with Jewel’s competitor, B&J City Kitchen, and that other retailers have other options,” he said.
The purchase is Coles’ first business acquisition since the company listed on the ASX in late 2018. A spokesperson for Coles said it will help the supermarkets to deliver on its “commitment to becoming a destination for convenience and health”.
“Jewel’s Sydney-based manufacturing plant boosts our food production capability, which includes our Ready Retail Operations Australia meat facility producing pre-packed meat in Sydney, and our Chef Fresh convenience foods operation in Geelong which makes ready-to-cook products such as pre-marinated meats and bake-at-home meat-filled pastries, as well as some ready-made meals,” the spokesperson said.
GM National Meat Processing Larry Kavanagh will manage Jewel alongside his existing responsibilities at Chef Fresh and RROA.
Had a sale to Coles not been on the table, the ACCC determined that the next best alternative for Jewel’s administrators would be liquidation of assets.
“The continuation of Jewel’s production of chilled ready meals is a better outcome for competition than liquidation of the assets,” Ridgeway said.
Although the ACCC investigation took place before the current supermarket stockpiling issues, the watchdog said the decision remains appropriate.