The Australian Competition and Consumer Commission will not oppose Woolworths' proposed acquisition of 19 Action supermarkets and three development sites, ACCC Chairman, Mr Graeme Samuel, said today.
"Eight local markets were initially identified as raising competition concerns in the ACCC's Statement of Issues on 31 August 2005", Mr Samuel said.
"Woolworths will now not proceed with the acquisition of one of the stores identified, Spearwood in Perth. Instead Spearwood will be acquired by Metcash. Metcash is also acquiring 60 of the 82 Action stores and development sites in Australia, and the wholesale operation of Action's parent company Foodland Associated Limited".
In the case of the remaining six stores: Noranda, Maddington Village, Woodvale, Southlands Willetton (WA); Mermaid Beach and Mudgeeraba (Qld); and the Kalgoorlie (WA) development site, the ACCC has decided that the proposed acquisition is not likely to substantially lessen competition.
"In reaching this view the ACCC has considered further submissions from interested parties on price and non-price factors. It has also considered submissions from the merger parties about competition from new entrants such as Aldi, the availability of other new sites for potential entry, information about the pricing practices of supermarket chains, and the results of a review of confidential pricing information across a range of products in various Perth Woolworths supermarkets.
"Evidence was sought from market participants to support the proposition that there is likely to be a substantial lessening of competition in any supply or procurement markets, but it was not forthcoming".
In relation to the other 13 supermarkets and two development sites, the ACCC has confirmed its preliminary view that no substantial lessening of competition is likely. Many of these supermarkets do not compete in the same local markets as existing Woolworths stores. Those that do currently compete with Woolworths will continue to face strong competition from other supermarkets, including those operated by Coles, Metcash banner groups, Aldi, and other independents.
These stores are: Kingscliff (NSW); Birkdale, Highfields Plaza (Qld); Stirling Central, Bassendean Square, Garden City Booragoon, Broome Boulevard, Ocean Keys, Dog Swamp, Kalamunda, Mundaring, Palmyra (Stammers), Port Hedland (WA). The two development sites are Alexander Heights (WA) and Caloundra (Qld).
A Public Competition Assessment explaining the ACCC's reasoning will be posted on the ACCC's website, under mergers.