Legal battle for Woolworths continues

Progressive has announced it is heading to the Privy Council to fight last year's Court of Appeal decision which overturned the regulatory clearance from the Commerce Commission.

The ongoing battle harks back to July last year when the Commission gave the green light to Progressive to acquire the Woolworths chain, subject to some divestments. At the time the Commission said it was satisfied that Progressive would not acquire or strengthen dominance in any market through the acquisition.

However rival supermarket operator Foodstuffs took a legal case claiming that the clearance had been processed incorrectly and should be judged by newer, and stricter, competition rules.

Progressive did apply under the new rules but was turned down. Progressive runs three chains of supermarkets in New Zealand - Foodland, Countdown and 3 Guys - and is owned by Perth-based retailer Foodland Associated (NZSE: FAL).

Foodland's group managing director, Trevor Coates, says his company has now received legal advice from eminent counsel and there are strong grounds to contest the decision of the Court of Appeal.

"This being so, the board has determined to press ahead with Progressive's appeal to the Privy Council scheduled for late April."

Mr Coates says if the company is successful in its Privy Council appeal it will approach Woolworths NZ owner, Dairy Farm, to once again establish their interest in disposing of the supermarket chain.

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