Competition watchdog approves BreadTalk’s acquisition of Food Junction

[The_King]

SINGAPORE — Food-and-beverage firm BreadTalk Group has been given the green light by the competition watchdog to buy food-court operator Food Junction Management, which will make it the third largest food-court operator here.

 

The Competition and Consumer Commission of Singapore (CCCS) said in a statement on Tuesday (Oct 15) that the acquisition will not lead to a significant lessening of competition within relevant markets in Singapore, and BreadTalk will still face competition from many other food vendors.

 

It noted that BreadTalk’s market share after acquiring Food Junction will still be below 20 per cent — “considerably lower” than the market shares of larger food-court operators such as Kopitiam and Koufu.

 

With the acquisition, BreadTalk Group will take over 12 Food Junction outlets here, in addition to the 14 food courts it already operates under the Food Republic and Food Opera brands.

 

On Sept 2, the company announced that it was planning to acquire Food Junction through its subsidiary, Topwin Investment Holding, for S$80 million.

 

CCCS said that it received a notification from Topwin on Sept 4 for a decision on whether the proposed buyout would result in a substantial lessening of competition within any market in Singapore.

 

 

As part of its assessment, CCCS conducted a public consultation and contacted key stakeholders including landlords, competitors, food vendors and individual consumers to gather relevant information.

 

Most stakeholders indicated that they have no concerns with the buyout. However, some raised concerns relating mainly to an increase in rent to food vendors after the merger, higher prices for food sold on food-court premises, and a reduction in food quality and variety.

 

For the concerns relating to lower food quality and variety, CCCS found that they are “unlikely to materialise”.

 

 

It said that besides the presence of many competing third-party food vendors, shopping mall operators place significant emphasis on food-court operators’ ability to differentiate their food-court concepts, food mix and price points, particularly if there is more than one food court in a mall.

 

The shopping mall operators also retain sufficient control over the prices, quality and choices of food available to individual consumers because they seek to attract more human traffic to the malls, CCCS said.

 

It added that the merged entity may instead be able to “better compete with the other larger food-court operators post-merger”.

 

 

Food vendors have some bargaining power and could switch to other food-court operators if they offered better business prospects, CCCS also said.
 

Read more at https://www.todayonline.com/singapore/competition-watchdog-approves-breadtalks-acquisition-food-junction

[aaur4man]

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