Following its approval of a managed sell down of the Franklins supermarket chain* the Australian Competition and Consumer Commission today issued a draft determination proposing, temporarily, to allow Franklins and some buyers of its supermarkets jointly to promote products sold in Franklins supermarkets.
"The proposed authorisations will benefit consumers by increasing the amount of promotional activity engaged in by buyers of Franklins supermarkets during the period that stores are being transferred to them", ACCC Chairman, Professor Allan Fels, said today.
“The ACCC’s proposed authorisation** allows Franklins to develop a joint marketing and advertising plan for the promotion of products sold under the Franklins banner with each of Pick ‘n Pay and Action. The agreement with Pick ‘n Pay will cover groceries promoted in NSW and the agreement with Action will cover groceries promoted in northern NSW and Queensland.
“The ACCC also proposes to authorise a clause in the sales agreements of independent buyers of Franklins stores continuing to trade under the Franklins banner which requires these buyers to comply with Franklins’ promotional programs for a limited period.
"Increased promotional activity will facilitate the transfer of successful supermarkets to Action, Pick ‘n Pay and independent grocers, and contribute to maintaining the success of the Franklins banner. In turn, this will facilitate continued competition in the eastern Australian grocery industry by enhancing the ability of Action, Pick 'n Pay and independent grocery retailers to compete with companies like Coles and Woolworths.
"The ACCC considers the detrimental effect on competition that may result from the proposed authorisations is limited. The agreements will only apply to promotional pricing, will only specify minimum discounts and the parties to the arrangements will be able to price all other products sold in their supermarkets independently, as well as engage in other promotional activities.
The ACCC proposes to grant authorisation until the date that the last Franklins store is closed or sold, or 1 April 2002, whichever occurs sooner. The ACCC granted interim authorisation in relation to these applications on 4 July 2001. A copy of the ACCC’s draft determination will be available on the ACCC's website at http://www.accc.gov.au.