The Federal Court has handed down its decision in the Metcash case this morning, clearing the path for Metcash's proposed merger with Franklins by determining that it is not likely to be anticompetitive.

The case largely turned on the scope of the 'relevant market'. Justice Emmett stated that when determining whether the proposed merger is likely to be anticompetitive, the 'relevant market' is not to be limited to the wholesale supply of packaged groceries to independent retailers in NSW (in which Franklins is Metcash's only genuine competitor) but is the wider grocery market which includes Woolworths, Coles and Aldi, in which there are numerous large competitors. It was determined that in that wider market, a merger between Franklins and Metcash would not be likely to reduce competition. In fact, Justice Emmett stated that 'it is quite likely that the acquisition of Franklins by Metcash will strengthen the capacity of independent retailers operating under the IGA banner to compete more vigorously with the major supermarket chains'.

Full reasons will be handed down by the court tomorrow.‚Äč