Woolworths seeks clearance from Commerce Commission for Beak and Johnston acquisition

Woolworths is hoping to acquire food manufacturer Beak & Johnston, which makes ready-made meals and other products here and in Australia. Photo / Investore

Supermarket giant Woolworths is seeking clearance from the Commerce Commission and the Australian Competition and Consumer Commission to acquire food manufacturers Beak & Johnston (B&J).

B&J produces ready-made products such as soups and frozen meals for Australia and New Zealand under the brands Artisano, Strength Meals Co. and Pitango, among others.

The business also manufactures private label products for retailers and other food service providers and is a nonexclusive distributor of the “Impossible” meat alternative brand in New Zealand.

The proposal, in which Woolworths Australia seeks to acquire 100% of the shares of Beak & Johnston Holdings, would see it acquire the B&J New Zealand business, currently operating out of its site in Wiri, South Auckland.

Woolworths initiated the purchase of the business in August.

The supermarket chain believes the ready-meal category “presents a considerable opportunity” a Woolworths NZ spokesperson said.

"Woolworths, a long-standing customer of Beak & Johnston Group (B&J) for over 37 years, has been partnering with the company to provide popular Woolworths-branded products such as lasagnas, pies, and Indian and Asian ready meals."

“With a minority stake in B&J City Kitchen since 2017, Woolworths is further investing in local manufacturing sites in Australia and New Zealand to continue its expansion into the growing ready-meal category.”

Woolworths, in its submission to the commission, argued its acquisition of the brand would not give rise to any horizontal, vertical input foreclosure or vertical customer foreclosure concerns.

They particularly acknowledged that there are a number of alternative suppliers for each and every product manufactured by B&J, including Naked Kitchen, Kraft Heinz/Wattie’s and Beyond Meat.

The submission also said the majority of B&J New Zealand’s sales were to Woolworths itself.

B&J was founded in 1986 by David Beak, who remains executive chairman, with Shannon O’Connell the New Zealand business director.

The New Zealand business currently employs 65 people.

According to its website, it was the first company in Australia to produce case-ready meat.

B&J acquired Pitango Organic Soups out of receivership in 2013, and subsequently pumped in $1 million to keep the brand going, before investing a further $3 million into the Wiri factory.

Woolworths already owns 23% of the Australian sister company, B&J City Kitchen, which it intends to wholly acquire through this deal.

Woolworths and B&J City Kitchen have been formal partners since December 2017.

The Commerce Commission is expected to decide on the application by March 12.

Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.