Views sought: BreadTalk’s acquisition of Food Junction

The Competition and Consumer Commission of Singapore is inviting public feedback on BreadTalk Group's proposed $80 million acquisition of Food Junction Management.

This comes after BreadTalk subsidiary Topwin Investment Holding, which has entered into a sale and purchase agreement for the acquisition, asked for a decision on whether the transaction would infringe the Competition Act.

Section 54 of the Act prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore.

Topwin submits that it primarily overlaps with foodcourt operator Food Junction in two markets.

They involve the sale of drinks, fruits, snacks, desserts and hot meals to consumers in foodcourt premises, as well as the rental of stalls to food vendors.

Topwin also said the proposed transaction will not result in a substantial reduction of competition in these markets here, in part because both are "highly competitive" and the merged entity will continue to be constrained by a large number of competitors.

Customers can easily switch across multiple alternatives for hot meals, it added.

Food vendor tenants can also move to other coffee shop and foodcourt premises if they find that the rental terms offered are not competitive.

Topwin said the barriers to entry and expansion are low as "it is not unduly restrictive or onerous for food vendors and foodcourt operators to obtain the necessary operating licences from the Government".

It is also not overly costly for food vendors to set up new stalls in foodcourts, coffee shops and hawker centres, it added.

Topwin also submits that the merged entity "faces strong countervailing constraints by landlords, who may choose not to renew the master lessor if the rental rates imposed on f

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