The ACCC opposes Woolworths' proposed acquisition of the SUPA IGA in Karabar, NSW and its co-located Liquor Boss store, after concluding the transaction would be likely to substantially lessen competition in the supply of groceries in the local area.
"The proposed acquisition would see Woolworths operate three of six supermarkets in the local Queanbeyan/Jerrabomberra area. Local consumers would be left with just one Coles and two ALDI stores as alternatives," ACCC Chair Gina Cass-Gottlieb said.
"We concluded that the removal of the SUPA IGA would likely result in a substantial lessening of competition in the area."
Woolworths already operates two supermarkets in the neighbouring suburbs of Queanbeyan and Jerrabomberra. The SUPA IGA is the only independent supermarket in the local area.
"The more supermarkets or grocery stores there are, the better outcomes for local consumers, who can change where they shop based on the most competitive offerings for their particular needs," Ms Cass-Gottlieb said.
The retail supply of groceries in the Queanbeyan and Jerrabomberra area is already highly concentrated and replacing the SUPA IGA with another Woolworths owned store would further increase this concentration.
The proposed acquisition will also affect the various suppliers who currently supply SUPA IGA, particularly those who provide those products that are not stocked by Woolworths.
The ACCC's analysis found that the SUPA IGA Karabar, which is independent and locally owned, offers a different shopping experience to Woolworths, Coles and ALDI. This differentiated shopping experience generates competitive tension in the local area that would be lost if it was acquired by Woolworths.
"Supermarkets compete not just on the price you pay at the checkout, but the frequency and types of promotions they run, the range of products they sell, the quality of these products, and the level of service delivered at the store," Ms Cass-Gottlieb said.
"It also has the ability to make decisions locally, and to dynamically adapt and respond to changes in tastes and preferences of local customers," Ms Cass-Gottlieb said.
The ACCC's decision was informed by data analysis of the spending habits of local consumers, including how often and how much local consumers spent at different supermarkets in and outside the local area.
Throughout its review, the ACCC engaged with a range of businesses and industry bodies. The ACCC also received feedback from consumers, with over 700 responding to survey questions or providing written submissions.
Background
The SUPA IGA Karabar is an independent supermarket which sells a range of groceries and liquor in an attached liquor store (trading as Liquor Boss), located in Karabar, NSW.
Karabar is a small residential suburb approximately 2.5km from the town centre of Queanbeyan, NSW, which lies to the south-east of Canberra.
SUPA IGA Karabar and Liquor Boss are owned by Karabar Property Pty Ltd, controlled by John Krnc, who also owns the Karabar Shopping Mall in which they are located.
The ACCC previously opposed Woolworths' proposed acquisition of the Karabar Supermarket in 2008 (then under different ownership and trading under the "Supabarn" brand). Further detail on the ACCC's 2008 merger review, including the Public Competition Assessment, is available on the ACCC's Public Mergers Register.
