ACCC allows Woolworths to acquire ACT Supa IGA store
The ACCC has announced that it will not oppose a proposed acquisition by Woolworths of the Supa IGA supermarket in Hawker (Australian Capital Territory) after concluding that the acquisition would not result in a substantial lessening of competition in any market.
Under section 50 of the Competition and Consumer Act, a corporation must not acquire any assets of a person if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market.
According to ACCC Chairman Rod Sims, “The ACCC commissioned customer surveys to test whether this product differentiation was so strong that, taken with other facts, the removal of the Hawker Supa IGA as an independent rival in the market could lead to a substantial lessening of competition.
“The customer surveys showed that while non-price aspects of the Hawker Supa IGA offer were valued by consumers, only a small proportion of survey respondents said an aspect of the Hawker Supa IGA’s range, service or pricing was the most important reason they shopped there…the Hawker Supa IGA drew very few customers from outside the suburbs immediately surrounding it”.
The close proximity of Coles and Aldi supermarkets to the Hawker Supa IGA store also meant that the acquisition by Woolworths would not substantially lessen competition in the market.
This decision is in contrast to a June 2013 decision by the ACCC to oppose an acquisition by Woolworths of the supermarket site at Glenmore Ridge in New South Wales. In that case, the ACCC held that the acquisition would result in a substantial lessening of local supermarket competition, despite Woolworths’ competitor Aldi being due to open a store in the area in 2014, because Woolworths already operated the only supermarket in the suburb as well as the next closest supermarket in a nearby suburb.
