The ACCC will not oppose the proposed acquisitions of the Beach Hotel and Tower Hotel by Endeavour Group Limited (ASX:EDV), after accepting a court-enforceable undertaking offered by Endeavour to divest its BWS Seaford bottle shop.
During the ACCC’s review, Endeavour revised its acquisition proposal and offered to divest the BWS Seaford bottle shop, in order to expedite the ACCC’s review.
Under the revised proposal, Endeavour has also withdrawn its proposal to acquire two other South Australian hotels: the Crown Inn in Old Reynella and the Whitehorse Inn in Bolivar.
Beach Hotel not opposed, subject to divesture
The Beach Hotel in Seaford includes a hotel and independent bottle shop operating under the Cellarbrations brand. Endeavour owns the nearby BWS bottle shop in Seaford Central.
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“The BWS in Seaford Central and Beach Hotel’s Cellarbrations, are the two largest bottle shops in the local area and are each other’s closest competitors,” ACCC Commissioner Stephen Ridgeway said.
“We were concerned that without the divestment undertaking, the proposed acquisition would be likely to substantially lessen competition in the supply of takeaway liquor in the local area.”
To address the ACCC’s concerns, Endeavour has provided a court-enforceable undertaking that commits it to divest the BWS Seaford store to a purchaser approved by the ACCC.
“This divestment will ensure that consumers in the local area around the Beach Hotel benefit from competition between large liquor stores with different promotions, range and service offerings,” Mr Ridgeway said.
Tower Hotel not opposed
The Tower Hotel in Magill includes a hotel and independent bottle shop operating under the ‘Cellarbrations’ brand. Endeavour owns the Norwood Hotel, and a number of BWS and Dan Murphy’s stores in the local area.
In relation to the supply of takeaway liquor in the local area around the Tower Hotel, the ACCC concluded that Endeavour would continue to be constrained by other bottle shops in the area post-acquisition.
“Consumers in the local area would continue to have access to Coles’ Liquorland and Vintage Cellars stores, and other independently owned bottle shops, operating under a range of banners including SipnSave, Cellarbrations and Booze Brothers,” Mr Ridgeway said.
The ACCC also considered the supply of on-premises services at the Tower Hotel and Norwood Hotel, but concluded that Endeavour would continue to face competition from a number of alternative liquor, food and gaming providers post-acquisition.