QIW Retailers Ltd v Davids Holdings
(1993) 42 FCR 255; (1993) ATPR 41-226; (1993) 114 ALR 579  FCA 204
Note: this was page relates to the trial judgment.
The decision was appealed to the Full Court of the Federal Court of Australia. View appeal.
QIW and Davids’ were wholesale suppliers of groceries to independent retailers. Davids attempted to take over QIW.
Davids’ argued the market was the supply and distribution of groceries to consumers (including wholesale and retail activities) and that the geographic market was Australia or, alternatively, the eastern mainland states.
Note Davids Holdings became Metcash in September 2000.
The market was for the supply of groceries by independent wholesalers to independent retailers in Queensland and northern NSW. The Court rejected the argument that there was no difference between wholesale and retail functional level.
[at 41,129] ‘… while in some circumstances it will be appropriate to restrict the relevant market to one functional level (e.g. the wholesale market or the retail market), in other situations the relevant market may extend over one or more of such functional levels.'
The Court sets out a number of examples of where functional market issues might arise and how they have been resolved by courts in the past.
In relation to this case the Court said, at 41,142
‘No warrant for ignoring the distinction between wholesale and retail functional levels [41,143] exists in the business structure of Davids or QIW. Unlike the major chainstores, neither Davids nor QIW is vertically integrated in any relevant sense. The involvement of both firms at the retail level is of a marginal character only. … "Fringe activity" on this scale does not compel any alteration of the dimensions of the market. Nor does it reveal sufficiently strong and pervasive links between wholesale and retail levels to warrant this otherwise clear functional distinction being disregarded.’