The Australian Competition and Consumer Commission today announced it will oppose the proposed acquisition by the Woolworths/Lowe’s Joint Venture (Woolworths) of an independent chain of three hardware stores owned by G Gay & Co in Ballarat, Victoria.

Woolworths has secured a site and has plans to open a Masters store in Wendouree, in the Ballarat area in 2013.

The ACCC concluded that the proposed acquisition is likely to result in a substantial lessening of competition through the removal of what will be one of Woolworths’ two closest competitors in the Ballarat area. The other remaining key competitor being the Wesfarmers owned Bunnings.

“The ACCC is concerned about the removal of a key independent competitor from the market to the detriment of competition and local consumers.” ACCC Chairman Rod Sims said’

“G Gay & Co is a vigorous and effective competitor in terms of price, product range and service and is likely to provide a strong competitive constraint on Masters in the Ballarat area.”

The ACCC’s investigation indicated that the remaining suppliers of hardware and home improvement products in the Ballarat area were either significantly smaller than the G Gay & Co stores or had a limited product offering and marketing presence, such that they would be unlikely to compete effectively against the Woolworths’

Masters store and Bunnings. The ACCC further concluded that the threat of new entry into the Ballarat area would be unlikely to replace the competitive constraint on the Masters store and Bunnings offered by the G Gay & Co stores.

Woolworths is present in the hardware and home improvement market through its ownership of:

  • Danks, a wholesale distributor of hardware products which manages the ‘Home Timber and Hardware’, ‘Thrifty-Link Hardware’ and ‘Plants Plus’ brands;
  • Masters Home Improvement ‘big box’ stores; and
  • A number of other retail hardware stores, including Gunns Retail, Becks Home Timber and Hardware, Magnet Mart, Mittagong Home Timber and Hardware, Flatman’s Home Timber and Hardware and Tait Timber and Hardware.

Related register records