The planned purchase of food court operator Food Junction Management by BreadTalk Group has been cleared by the Competition and Consumer Commission of Singapore (CCCS).
The deal, announced in early September, will see BreadTalk pay $80 million for the rival business creating an entity which would account for about 20 per cent of Singapore’s food court market business.
While BreadTalk operates 14 food courts branded Food Republic in Singapore and two in Malaysia, and Food Junction has 12 in Singapore and three in Malaysia, the CCCS ruled the merger “will not lead to a substantial lessening of competition within the relevant markets in Singapore”.
While the CCCS received submissions from consumers and tenants fearing rent increases or higher prices may result at food courts, post merger, the commission said that most stakeholders expressed no concern with the proposed deal. It said concerns about the potential for poorer food quality or higher prices were “unlikely to materialise”.
“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 premises in the mall,” the commission said in its ruling.
“The shopping mall operators also retain sufficient control over the prices, quality and choices of food available to individual consumers in their food court premises as they seek to attract more customer footfall to their malls. These concerns are therefore unlikely to materialise,” it concluded.