Australian Competition and Consumer Commission chairman Rod Sims has explained the ACCC’s approach to acquisitions by the major supermarket chains while addressing the Committee for Economic Development of Australia (CEDA) in Sydney.
“The national chains are increasing their participation in the liquor, grocery and home improvement sectors, particularly through many small acquisitions,” ACCC chairman Rod Sims said.
“The ACCC is concerned to ensure that further acquisitions do not ultimately lead to retail or indeed wholesale industry structures that may adversely affect the competitiveness of these markets or reduce choice for consumers.”
“Because of these concerns, the ACCC has been paying increased attention to incremental acquisitions to identify which acquisitions require review and, of those, which raise competition concerns.”
The ACCC is currently assessing a number of proposed small retail acquisitions by the major supermarket chains including several hotels and liquor stores in NSW, a number of hardware stores in Ballarat and the purchase of two supermarkets in Western Australia.
In recent years, there has been an informal and cooperative arrangement in place between the ACCC, Wesfarmers and Woolworths regarding the supermarket transactions they would notify to the ACCC.
“The ACCC is now actively engaging with Woolworths and Wesfarmers to expand these arrangements to cover a wider range of acquisitions and sectors. We are proposing improved arrangements that we hope will bring mutual benefit,” Mr Sims said.
“The ACCC believes that our processes can be streamlined. This can, however, only occur with appropriate notification, cooperation and upfront information,” Mr Sims said.
In return for advanced notice of a wider range of acquisitions, and for particular information being provided upfront with each transaction, the ACCC would establish a dedicated team to assess these transactions within specified times which will enable the ACCC to identify more quickly any competition issues raised by these small retail acquisitions.