Coles expansion plans under the microscope

ColesThe Australian Competition and Consumer Commission (ACCC) is concerned Coles’ proposed acquisition of nine Supabarn supermarkets in NSW and the ACT may lesson competition.

The ACCC received approximately 60 submissions from consumers and held a consumer forum in Canberra last month about the proposed acquisition of privately-owned supermarket Supabarn by Wesfarmers.

“The ACCC recognises that Supabarn has a differentiated offer to that of the other supermarkets and understands that this is valued by consumers,” ACCC chairman, Rod Sims, said.

“The ACCC is closely examining the effect of removing a supermarket chain with a differentiated offer from the market. In particular, Supabarn is the only full-line supermarket chain in the ACT other than Coles and Woolworths. The ACCC is concerned that Supabarn’s removal may lead to significant competitive harm and loss of choice for consumers.

“The ACCC recognises, however, that there are other, smaller supermarkets operating in the ACT,” Sims said.

Sims added the competition watchdog is examining the effects on competition in each local geographic area where Supabarn competes, especially where Coles and Supabarn stores are located close together and there is limited competition from other supermarkets.

“The ACCC has identified potential concerns in a range of local markets. These concerns are particularly strong in Sans Souci and Sutherland in NSW, and Casey in the ACT where Supabarn is to open its largest store,” Sims said.

The ACCC is yet to make a final decision on the deal and invites further submissions from interested parties until October 1, 2015. Submissions can be emailed to Coles-Supabarn-Mergers@accc.gov.au.

The ACCC expects to make a final decision on the proposed acquisition by November 26, 2015.

This story first appeared on Inside Retail’s sister site, Inside FMCG

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