The ACCC has outlined preliminary competition concerns with Woolworths’s (ASX:WOW) proposed acquisition of the independent supermarket operating as SUPA IGA in Karabar, and co-located liquor store operating as Liquor Boss, in a statement of issues published today.
Woolworths and SUPA IGA Karabar currently compete in supplying groceries in the broader Queanbeyan region (encompassing Karabar and Jerrabomberra). Woolworths already operates two supermarkets within a 5km radius of SUPA IGA Karabar, in Queanbeyan and Jerrabomberra.
“Competition between supermarkets is important in ensuring different product ranges, promotions, and service offerings. We are concerned that this proposed acquisition is likely to substantially lessen competition in the supply of groceries in the local area,” ACCC Commissioner Liza Carver said.
“Within a 5km radius of SUPA IGA Karabar, it would reduce the number of operators of supermarkets with a significant size and range from four to three, leaving only Woolworths, Coles and ALDI.”
“We are also considering whether the acquisition raises similar concerns in relation to liquor stores, by removing the Liquor Boss as an independent competitor to major liquor store operators.”
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The ACCC is also investigating the impact of the acquisition on the competitiveness of other independent supermarkets in the region. In particular, whether removing the Karabar store from the IGA network, and removing it as a wholesale customer of Metcash, impacts the efficiency and competitiveness of other stores that operate under the IGA banner, or receive supply from Metcash.
The ACCC invites submissions from interested parties in response to the statement of issues by 12 January 2023.
