Australian United Retailers Ltd (FoodWorks) - proposed acquisition of 45 supermarkets and 8 liquor stores from Wesfarmers Limited

Australian United Retailers Ltd (Foodworks)

45 supermarkets and 8 liquor stores from Wesfarmers Limited

FoodWorks proposed to acquire 45 supermarkets and 8 adjoining liquor stores from Wesfarmers Limited. The 45 supermarkets are located in Victoria, South Australia, New South Wales and Queensland; comprising 37 Coles stores and 8 Bi-Lo stores.

The ACCC considered the proposed acquisition in the context of the following markets:
- local retail markets, with a 3-5 km geographic radius in urban and regional areas, and a 10 km radius in rural areas, for the supply of supermarket and liquor products; and
- state-based wholesale and procurement markets for supermarket and liquor products.

The ACCC formed the view that the proposed acquisition was unlikely to substantially lessen competition in the relevant markets for the following reasons:
- with respect to the relevant retail markets, in areas where FoodWorks already has a member supermarket, there would be at least one, and in the majority of cases, two or more, competing full-line supermarkets to the merged firm; and
- with respect to the relevant wholesale and procurement markets, the ACCC considered that the proposed acquisition was unlikely to raise competition concerns given the marginal transfer of buying power as a result of the transaction.