The competition watchdog is moving to block the acquisition of a bankrupt chilled ready meal manufacturer by a rival company.
The Australian Competition and Consumer Commission on Thursday said the purchase of Jewel Fine Foods by B&J City Kitchen is likely to substantially lessen competition.
The two companies are the largest manufacturers of chilled ready meals in Australia, although Jewel is in administration.
“This proposed acquisition would combine the two major players in this market, concentrating most of the manufacturing capacity of chilled ready meals in one business,” ACCC chairman Rod Sims said.
“In contrast, if the proposed acquisition does not proceed, an alternative purchaser is likely to buy Jewel and compete strongly with B&J City Kitchen.”
B&J City Kitchen and Jewel have both been contacted for comment, as has an administrator for Jewel with KPMG.
Mr Sims said B&J City Kitchen had not initially sought clearance from the ACCC for the acquisition.
“It is critical that company executives understand that attempting to sell businesses or assets to a competitor, particularly a close competitor, is likely to attract the attention of the ACCC,” Mr Sims said.
“Not seeking clearance from the ACCC risks court action from the ACCC seeking injunctions to prevent completion of the transaction, as well as divestment and penalties.”
In making the decision to oppose the takeover, the ACCC decided that chilled ready meals didn’t compete closely with products such as frozen meals and takeaway foods.
B&J City Kitchen sells chilled ready meals made at its facility in Western Sydney to grocery retailers under the brands Pitango, Beak & Sons and Tasty Pot Co.
The company is 23 per cent owned by Woolworths Group.
Jewel sells meals from its factory in Banksmeadow, NSW, under the brands such as Quick as Wok, Spice & Passion and Jewel of India.
The company was founded by Indian immigrants Kishore and Indrani Matta in 1997 and won Telstra’s 2016 Medium Business of the Year Award in 2016.
It entered administration in April.