ACCC concerned after-school care merger can lead to greater charges

Updated August 10, 2017 16:36:44

A suggested merger between two nation’s largest after-school care companies could cause greater charges minimizing quality care, your competition watchdog finds.

The Australian Competition and Consumer Commission (ACCC) has released an adverse preliminary set of Camp Australia’s bid to purchase Junior Adventures Group, which operates OSHClub and Helping Hands centres.

If approved, the merger would lead to 25 percent of from the nation’s before- after-school services being operated by exactly the same provider.

In Victoria, it might be nearer to two in each and every three.

“I believe our primary concern is you have the 2 greatest players within the out-of-hrs school care market getting together and they’ll be, combined, undoubtedly the biggest player, that will dwarf other players,” stated ACCC Chairman Fishing rod Sim cards.

“Our problem is that the lack of competition often see parents getting to pay for greater prices for out-of-hrs school care and may see schools lose a little bit of their bargaining position.”

He stated there have been also concerns that too little competition could drive standards lower.

“The very fact they’d be this type of heavyweight, they might start setting service standards and for those who have got this type of strong market position, you might aim to lower service standards and lift prices, so we have got concerns on cost and repair.Inch

Camp Australia, of the U . s . States-based private equity finance firm Bain Capital, may be the country’s largest provider of before- after-school care, about 780 centres searching after nearly 50,000 Australian schoolchildren.

It really wants to dominate another 400 centres presently operated by Junior Adventures Group, which operates underneath the names OSHClub and Helping Hands.

Junior Adventures Group is a member of the non-public equity firm Advent Partners.

Peak body welcomes ACCC findings

The height body for before- after-school care, Network of Community Activities, has welcomed the ACCC’s preliminary findings.

“For schools, it’s reveal what’s really happening, the foreign takeover from the out-of-school-hrs sector and the concept that government-funded subsidies to families will really go to foreign investors,” Chief executive officer Robyn Monro Miller stated.

“The very fact they belong to a good investment company means shareholder profits are likely to take priority within the care and wellbeing of kids, and i believe that’s something we really should consider like a community.

“Is the fact that what we should want for future years of kids in childcare services?”

In December this past year, Camp Australia was declared ineligible to win or renew any government contracts in Nsw following numerous breaches.

The NSW Education Department has confirmed that OSHClub and Helping Hands are presently qualified to use.

Mr Sim cards stated he was conscious of concerns the merger will give Camp Australia a back-door admission to the NSW market.

“The priority about service standard of Camp Australia did feature within our thinking. It had been informed by what’s going on in NSW however the concern would be a bigger one than simply utilizing it like a back-door access point,Inch he stated.

A spokesperson for Camp Australia stated the organisation was “reviewing the ACCC’s announcement”.

Junior Adventures Group seemed to be contacted for comment.

The ACCC will release its final report in October.

Topics: consumer-protection, business-financial aspects-and-finance, company-news, child-care, sydney-2000

First published August 10, 2017 16:23:00