Supermarket giant Coles has officially signed the acquisition contract and purchased one of its major customers.
KPMG Voluntary Administrators Peter Gothard, James Dampney and Stephen Parbery announced on May 1 that the sales process for the business operations of Jewel Fine Foods (Jewel) has been completed.
Jewel has been in voluntary administration since April 2019, manufactures a range of branded and private-label chilled ready meals. Coles does not currently manufacture these products, but is Jewel’s major customer.
The Administrators confirmed that a sale contract was signed on Wednesday, 18 March 2020 with Chef Fresh Pty Ltd, a wholly owned subsidiary of Coles Group Limited.
The ACCC subsequently considered the sale and on 25 March 2020 confirmed that it would not oppose the proposed acquisition by Coles.
B&J City Kitchen tried to acquire Jewel in September last year but the ACCC opposed the decision on the basis that it would be likely to substantially lessen competition for the supply of chilled ready meals.
Stephen Ridgeway, ACCC Commissioner said Coles’ acquisition of Jewel ensures that there will still be two major suppliers of chilled ready meals.
Jewel manufactures a range of branded and private-label chilled ready meals from its facility in Banksmeadow, New South Wales.
Peter Gothard, KPMG Australia, restructuring partner said KPMG Australia are delighted to have reached a successful outcome in the current challenging environment.
“The sale is a positive step forward to providing a stable operating environment for everyone involved in the Jewel business,” Peter said.
James Dampney, KPMG Australia, restructuring partner also said the acquisition is a result of hard work.
“The entire team at Jewel have done an incredible job in continuing to produce a high quality product under very difficult circumstances,” he said.
“The successful sale of the business to Coles is a real credit to the way the management and staff of the business have performed during the Administration process.”
In late March, Stephen said The ACCC investigation focussed on whether other retailers would be foreclosed if Coles acquired the business.
“We found that Woolworths already has supply arrangements with Jewel’s competitor, B&J City Kitchen, and that other retailers have other options,” he said.
“We are pleased that the administration process will end with Jewel’s business continuing as a going concern and competing with other suppliers,”
“The continuation of Jewel’s production of chilled ready meals is a better outcome for competition than liquidation of the assets.”