Woolworths Limited - proposed acquisition of Roger and Dale's IGA in Thurgoona

Acquirer(s)

  • Woolworths Limited

Target(s)

  • Roger and Dales IGA in Thurgoona

Summary

Woolworths proposes to acquire the liquor licence, goodwill, liquor stock, and the supermarket space of Roger & Dales IGA, Thurgoona, NSW.

Market definition

For the purposes of this competition assessment the relevant markets were considered to be:
1. the local market for the retail sale of packaged liquor for off premises consumption. The geographic dimension of this market was considered to be approximated by a 3-6 kilometre radius surrounding the target business. (Market 1);
2. the local market for the supply of goods by supermarkets. The geographic dimension of this market was considered to be approximated by a 3-6 kilometre radius surrounding the target business. (Market 2);
3. the NSW market for the wholesale supply of packaged liquor for subsequent sale in the retail market for off-premises consumption (Market 3); and
4. The NSW market(s) for the procurement of products sold in supermarkets (Market 4).

Competition analysis

The ACCC formed the view that the proposed acquisition is unlikely to substantially lessen competition in the relevant markets for the following reasons:

1. In relation to Market 1, if a 3-5 km radius around the target business is adopted, the acquisition represents a bare transfer of market share, since Woolworths has no liquor outlets within 5km of the target. If a wider geographic market definition were adopted (6km), which would include another Woolworths outlet, the ACCC concluded that competition from Coles and a number of independent hotels will provide a competitive constraint on Woolworths post-acquisition;

2. In relation to Market 2, while Woolworths will own two stores in the local market post-acquisition, it will continue to face competition from a number of competitors, including a Coles and an ALDI store as well as independents, which are likely to constrain Woolworths post-acquisition;

3. In relation to Markets 3 and 4, the ACCC considered that the acquisition of one retail store is unlikely to significantly increase Woolworths' market share (or buying power) in either market.

Timeline

DateEvent
02/03/2007ACCC commences review under Merger Review Process Guidelines.
12/03/2007ACCC announced it would not oppose the proposed acquisition.