The competition watchdog has rebuffed Coles’ attempt to acquire a vacant site in regional Australia because it would “substantially” lessen supermarket competition in the area.
The Australian Competition and Consumer Commission said Coles would effectively push out an independent supermarket, and potentially its properties or assets, if Coles were to set up a full-sized supermarket and liquor store in Kalgoorlie-Boulder, Western Australia. The region currently has four supermarkets: a Woolworths, two independent stores, two smaller independent supermarkets, and an existing full-sized Coles.
Coles has been blocked by the ACCC.Oscar Colman
“We found that while a new Coles supermarket will offer benefits to some consumers, there is a real prospect that the acquisition would lead to the exit of an effective independent competitor, and its assets leaving the market,” said ACCC deputy chair Mick Keogh.
“New entry would not be timely enough and sufficient to offset the loss of competition likely to result from the acquisition.”
Independent supermarkets are an important constraint to the major chains, Keogh added.
“Based on our assessment of all of the material before us, we are satisfied that there is a real commercial likelihood that Coles’ proposed acquisition would substantially lessen competition in Kalgoorlie in the longer term, to the overall detriment of consumers.”