Philippines: Antitrust body approves SM Retail’s acquisition of Goldilocks Bakeshop

SM acquires Goldilocks
Visual from SM Investments' website

SM Retail Inc, a subsidiary of Philippine Stock Exchange-listed SM Investment Corp (SMIC), has received approval from the country’s antitrust body to acquire Goldilocks Bakeshop Inc., a major bakeshop chain in the country.

In a statement, the Philippine Competition Commission (PCC) said it has approved the acquisition by SM Retail of Goldilocks after the two parties submitted their commitment to address potential competition issues in the deal.

Among the potential concerns that were addressed by both parties was the possibility that there might be limited supply of retail space in SM Malls for Goldilocks’ competition.

There were also concerns that SM Retail might get access to and share competition’s sales information with Goldilocks.

“While selection of tenants in a mall is market-driven and based on consumer preferences, a mall operator should not be allowed to discriminate mall tenants and lease applicants, especially those that compete with stores owned by the mall itself,” said PCC Chairman Arsenio M. Balisacan.

SMIC, through another subsidiary, SM Prime Holdings Inc (SMPHI), operates close to 70 SM Malls in the Philippines. Goldilocks, on the other hand, has a network of more than 500 stores, some of which operate in SM Malls.

After the acquisition, Goldilocks will become a subsidiary of SM Retail.

In its voluntary commitment, which the PCC approved in a decision issued last December 29, 2017, SMPHI undertook to give Goldilocks’ competitors a “fair share in their lease at all times”.

SMPHI also committed to data protection; that is, the mall operator will not give Goldilocks access to competing mall tenants’ information, including sales data captured by the POS system of SMPHI tenants, whether referring to consolidated sales, product category level or stock keeping unit (SKU) level information, such as prices or quantities sold.

“The Commission appreciates SM’s move to make these voluntary undertakings – proof that PCC and the business community can work together to promote a culture of competition,” Balisacan said.

The SM Group is also legally obliged to comply with its commitment and submit reports to the PCC. Over a period of five years, the parties will be monitored periodically by a team of experts from PCC. The monitoring will also include random inspections, the commission added.

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