By Andrew Starke
The decision by independent grocery and liquor wholesaler Metcash Trading to acquire 85 Franklins supermarkets may have long-term implications for liquor retailing in NSW.
A spokesperson for Metcash stressed it was too early to speculate as many of the wholesaler’s directors are currently overseas and the deal must still receive Australian Competition & Consumer Commission (ACCC) approval.
Metcash currently has four Franklins stores located in or around the Canberra region that have a liquor offering.
“The Metcash acquisition of Franklins will have a positive effect on the Australian Liquor Marketers (ALM) / Independent Brands Australia (IBA) business as this will further build and grow the IBA and IGA (grocery) network and footprint of independent liquor/grocery stores in NSW,” a spokesperson told TheShout.
Metcash subsidiary ALM operates 18 distribution centres in Australia and New Zealand.
It supplies about 15,000 customers including hotels, liquor stores, restaurants and other licensed premises.
IBA’s three store brands are Cellarbrations, IGA Plus Liquor and Bottle-O.
Of the 85 Franklins supermarkets purchased, 77 are corporate stores and 8 franchised, with most likely to be sold to independent retailers in the Metcash / IGA network.
“The IGA network will significantly improve its competitive position against the national chains in Australia’s largest grocery market, NSW, while growing the market share of Metcash supplied retailers in the state from 11 percent to 17 percent,” said Metcash CEO, Andrew Reitzer, who late last year indicated the wholesaler was interested in new acquisitions.
“These stores will be able to take advantage of our favourable arrangements with suppliers to achieve more competitive pricing deals. Consumers and independent retailers in NSW are big winners from this deal,” he added.
The deal is expected to be finalised by expected by September 30 this year.
Metcash shares were trading at $4.31 at 1pm today (Jul 5), up from $4.19 seven days ago.
