Overview of Metcash's acquisition of Superior Food Services

Metcash Trading Limited (ASX: $MTS) has received approval from the ACCC for its proposed acquisition of wholesale food distributor SFG Group Holdings Pty Ltd, trading as Superior Food Services. The ACCC's review focused on the competition in the wholesale supply of food products to food service customers, the impact on suppliers, and the likely effect on prices, product range, and quality.

ACCC's assessment of the acquisition

We conducted extensive market inquiries with customers, suppliers, competitors, and industry associations. We ultimately found that the transaction would not be likely to substantially lessen competition. Although both Metcash and Superior supply food products, market feedback indicates that they do not compete closely for customers. The merged entity will continue to be constrained in the supply of food service products by established competitors such as Woolworths-PFD Food Services and Bidfood. We found that Metcash and Superior make up a very small percentage of the overall demand from food suppliers, and that suppliers would continue to have many other alternative routes to market.

Summary of Metcash's acquisition and outlook

Metcash's acquisition of Superior Food Services has been approved by the ACCC, allowing Metcash to expand its presence in the wholesale food distribution market. The review concluded that the acquisition is not likely to substantially lessen competition, as Metcash and Superior do not closely compete for customers. The merged entity will still face competition from established players like Woolworths-PFD Food Services and Bidfood. Metcash's expansion into the food service sector through this acquisition aligns with its strategy to diversify its product offerings and reach a broader customer base. The company aims to continue providing quality food products to independent supermarkets, retailers, and food service businesses, contributing to the overall competitiveness of the market.