Woolworths had plans in December for a wholesale operation to directly compete with Metcash Ltd (ASX:MTS), the Federal Court has heard.
The plan directly contradicts the opening submission by the consumer watchdog, which is trying to block Metcash’s purchase of the Franklins supermarket chain for $215 million.
On Monday the ACCC barrister said Metcash was the most powerful choice for independent retailers seeking the wholesale supply of groceries and Franklins was the only other potential and substantial supplier. The consumer watchdog’s barrister added that Coles and Woolworths would never extend wholesaling services to independent retailers.
Metcash argues its market power is constrained from Woolworths and Coles and the purchase of Franklins would help it compete.
Metcash generated a net profit of $113 million in the six months to 30 October 2010.
MTS Price at posting:
$3.89 Sentiment: None Disclosure: Held
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