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ACCC concerned over Woolies takeover

 

woolworthsThe Australian Competition and Consumer Commission (ACCC) has released a statement of issues outlining concerns with the proposed acquisition of Lindisfarne Cellars by Woolworths.

Lindisfarne Cellars is a bottleshop located within a neighbourhood shopping strip in the suburb of Lindisfarne, Tasmania.

It trades under the Duncan’s Liquor banner. Woolworths operates a Beer Wine Spirits bottleshop in the nearby suburb of Rosny.

The Statement of Issues seeks more information on a number of competition issues which have arisen from the ACCC’s review to date.

The ACCC’s preliminary view is that the proposed acquisition is likely to result in a substantial lessening of competition in the local market for the supply of takeaway packaged liquor.

“The ACCC is concerned that the proposed acquisition would remove one of the two largest competitors from the local market and replace it with an offer from Woolworths that is already available nearby,” ACCC chairman Rod Sims said.

“Woolworths already has a large share of the local market. The proposed acquisition would significantly increase market concentration, leaving Woolworths as the dominant supplier of takeaway packaged liquor in this market,” Sims said.

Market inquiries have indicated that Lindisfarne Cellars provides a competitive offer that is attractive to customers and that its removal would result in a loss of competitive tension and loss of diversity through a reduction in choice for consumers.

The ACCC invites further submissions from the market in response to the statement of issues by 17 January 2014.

As a result, the ACCC’s final decision will be deferred until 13 February 2014.

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