Tuesday, June 25, 2024

Woolies’ acquisition of SUPA IGA Karabar opposed by ACCC

The ACCC has opposed Woolworths’ proposed acquisition of the SUPA IGA in Karabar, NSW and its co-located Liquor Boss store.

It was concluded that the transaction would be likely to “substantially” lessen competition in the supply of groceries in the local area.

“The proposed acquisition would see Woolworths operate three of six supermarkets in the local Queanbeyan/Jerrabomberra area. Local consumers would be left with just one Coles and two ALDI stores as alternatives,” says ACCC Chair Gina Cass-Gottlieb.

“We concluded that the removal of the SUPA IGA would likely result in a substantial lessening of competition in the area.”

Woolworths already operates two supermarkets in the neighbouring suburbs of Queanbeyan and Jerrabomberra. The SUPA IGA is the only independent supermarket in the local area.

“The more supermarkets or grocery stores there are, the better outcomes for local consumers, who can change where they shop based on the most competitive offerings for their particular needs,” says Ms Cass-Gottlieb.

The retail supply of groceries in the Queanbeyan and Jerrabomberra area is already “highly concentrated”, says the ACCC, and replacing the SUPA IGA with another Woolworths owned store would further increase this concentration. The proposed acquisition would also affect the various suppliers who currently supply SUPA IGA, adds the chief competition regulator, particularly those who provide those products that aren’t stocked by Woolworths.

The ACCC’s analysis found that the SUPA IGA Karabar, which is independent and locally owned, offers a different shopping experience to Woolworths, Coles and ALDI. This differentiated shopping experience, says the ACCC, generates “competitive tension” in the local area that would be lost if it was acquired by Woolworths.

“Supermarkets compete not just on the price you pay at the checkout, but the frequency and types of promotions they run, the range of products they sell, the quality of these products, and the level of service delivered at the store,” says Ms Cass-Gottlieb.

“The local SUPA IGA competes with its different product mix, service offering and store amenity, and different promotional cycles.

“It also has the ability to make decisions locally, and to dynamically adapt and respond to changes in tastes and preferences of local customers.”

The ACCC’s decision was informed by data analysis of the spending habits of local consumers, including how often and how much local consumers spent at different supermarkets in and outside the local area.

Throughout its review, the ACCC engaged with a range of businesses and industry bodies. The ACCC also received feedback from consumers, with over 700 responding to survey questions or providing written submissions.

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