Supply chain problems factor in Metcash Franklins buyout.

Metcash has cemented its position as a third force in Australia's supermarket sector with a $215 million deal to buy the Franklins chain. As part of the deal, both companies have agreed to halt a five-year court battle over wholesale agreements under which Franklins claimed Metcash refused to pass on discounts from food manufacturers, leading Franklins to set up its own supply chain. Metcash chief Andrew Reitzer yesterday identified Franklins' in-house supply chain as a major factor in its poor performance.

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