Australia’s competition watchdog has blocked Coles from acquiring a new leasehold site in Kalgoorlie, WA.
The ACCC first received notice of Coles’ intentions to lease the site in November last year and then, in January, announced that the deal required further review over concerns of its impact on competition in the area.
This review has now finished, with the commission determining that the deal would “substantially” lessen competition in the retail supply of groceries by supermarkets in Kalgoorlie.
“We conducted extensive inquiries and analysis of material provided by Coles and third parties, and assessed the likely competitive effects of the acquisition on competition in the retail supply of groceries in Kalgoorlie,” said ACCC deputy chair Mick Keogh.
“Independent supermarkets are an important competitive constraint on the major supermarket chains. They provide consumers with meaningful choice, competition on service, quality and range, and competition on price for some products.”
Keogh conceded that a new Coles supermarket would benefit some consumers, but added that there is a “real prospect” that its arrival would lead to the exit of an independent competitor in the area.
“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,” Keogh said.
