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Ombudsman hits out at Woolies’ “opportunistic” PFD takeover

Image of factory
The new Woolworths Fulfilment centre in Lidcombe NSW.

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has backed the ACCC’s fears around Woolworths’ proposed acquisition of PFD Food Services, stating she formally opposes the $552 million deal.

On Tuesday the ACCC outlined its concerns that the deal could reduce the number of buyers in the food distribution sector, and would invariably increase Woolworths’ buying capacity and, by extension, PFD’s.

Carnell called the move “opportunistic”, and said she has made it clear to the ACCC that the acquisition would be detrimental to small business in the food space, as well as the economy more broadly.

“As a major beneficiary of Covid-19 restrictions, Woolworths’ supermarkets operations saw a significant upswing in sales, while independent food distributors struggled,” Carnell said.

“Now that Woolworths has exhausted its acquisition in the large supermarket space, it is moving into the smaller supermarket and food services arena. Allowing Woolworths to buy a controlling stake in PFD would give it significantly more power over other small supermarket operators that rely on PFD for deliveries and food services.”

Carnell expressed fear that such actions could lead to job losses, though Woolworths has previously noted the businesses will continue to act independently of one another should the acquisition go through.

“We have no presence in food service right now, and believe our investment will not only help PFD grow its business, but also add to competition and lift service levels across the industry,” A Woolworths spokesperson said.

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