Last month the ACCC reviewed the proposed acquisition by Woolworths of a supermarket site at the Glenmore Ridge Village Centre, while earlier this year it reviewed Woolworths’ acquisition of a retail centre including an IGA supermarket and adjoining land at the corner of North and Albert Streets, at Logan Village in Queensland.
Sally Scott, partner at law firm Hall & Willcox, told SmartCompany the ACCC can oppose proposed acquisitions if the likely result will be a “substantial lessening of competition”.
She says over the past six months or so, Woolworths appeared to have a strategy of acquiring sites, particularly in regional areas.
“The ACCC has been paying very close attention to the proposed acquisitions given that the company is a major player in both the supermarket and hardware spaces and acquisitions by such a major player in regional areas could have a detrimental effect on competition in those areas,” Scott says.
“Consideration needs to be given to the longer term impact of the big chains moving into each regional area.”
Scott says the ACCC is best placed to determine the long-term impact even if the local community supports the acquisition.
“The short-term impact could be positive but the long-term impact could in fact be quite detrimental if competitors are driven out of the area,” she says.
Scott says in the case of the G Gay & Co acquisition the ACCC does not have the final say and Woolworths does not need to accept the ACCC’s position.
“The ACCC is not suggesting that it will prevent Masters moving into the Ballarat area, that is not the case at all,” she says.
“However, what the ACCC is saying is that it will not allow Masters to move into the Ballarat area in a way that reduces competition.”
Scott says Woolworths can opt to issue court proceedings and ask the court to determine if the proposed acquisition is anti-competitive.
A spokesperson for Woolworths told SmartCompany the supermarket was undecided on its next move.
“We are pleased the ACCC has made an announcement after eight months of consideration. We will now look over it and consider our options,” the spokesperson said.
SmartCompany contacted G Gay & Co but no comment was available before publication.
