The ACCC’s investigation focused largely on the deal’s potential impact on food and grocery suppliers, who often view wholesale food distributors such as PFD as alternatives to the big supermarkets.

Mr Sims said many of the suppliers spoken to by the ACCC did not raise competition concerns, and it became apparent that Woolworths and PFD do not compete for customers to any meaningful extent. There were very few suppliers where both Woolworths and PFD make up a significant portion of their channels to market.

The ACCC also found many suppliers had additional channels to supply, such as manufacturing, institutional and restaurant chain customers, and exports.

However, Mr Sims admitted the amalgamation of the two large companies would likely change how the wholesale food distribution industry operates, acknowledging that Woolworths could become a larger and more aggressive player in the space.

“There’s no doubt having one of the two big players in the supermarkets space going into wholesale is a big change,” he said. “How it’s going to play out, we just don’t know.”

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Through its investigation, the ACCC also became aware of apparent issues with the Food and Grocery Code, with Mr Sims saying he believes the code should be made mandatory and should include civil penalties for non-compliance.

“It’s my strong view, having been around a fair time, is that its bad public policy to have a law or a code when there’s no sanction for breaching it,” he said.

Woolworths chief executive Brad Banducci said the company was pleased to gain the approval of the ACCC, with the deal now expected to be completed by the end of the month. Woolworths’ shares rose 0.8 per cent to $43 following the news.

“[PFD is] a great Australian success story and a well-respected business with both suppliers and customers in the foodservice industry,” he said. “This investment is a logical adjacency for Woolworths Group and further supports the evolution of the group into a food and everyday needs ecosystem.”

Woolworths and PFD had previously proposed a behavioural undertaking to the ACCC which would see the two businesses run separately to each other for three years in an attempt to allay supplier concerns over trading terms. On Thursday, the ACCC said market feedback suggested the undertaking would not be effective and it wasn’t necessary for the businesses to use one.

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