Woolworths Limited - proposed acquisition of Liquor Barons Dianella

Summary

Woolworths proposed to acquire a takeaway packaged liquor licence and business which currently trades as Liquor Barons Dianella and is located at Shop 4, Dianella Plaza Shopping Centre, Dianella, Western Australia.

Market definition

This proposed acquisition was assessed within the context of the following markets:
1. the local market for the retail sale of packaged liquor for off-premises consumption. The geographic dimension is a 3-5km radius surrounding the target retail liquor business (Market 1);
2. the Western Australian market for the wholesale supply of packaged liquor for subsequent sale in the retail market for off-premises consumption (Market 2).

Competition analysis

On 22 January 2008, the ACCC formed the view that the proposed acquisition is unlikely to substantially lessen competition in the relevant markets. Factors informing this conclusion included:
1. in relation to Market 1, the ACCC concluded that post-acquisition, Woolworths will be constrained by competition from Coles and a substantial number of independent bottle shops in the local area; and
2. in relation to Market 2, the ACCC considered that the relatively small increase in market share of Woolworths, as a result of the acquisition, was unlikely to significantly increase the buying power of Woolworths or substantially weaken any competing wholesaler by diminishing its buyer power.