Woolworths Limited - s.87B undertaking

On 11 November 2009, the ACCC accepted an undertaking from Woolworths Limited and Carboxy Pty Limited (a joint venture between Woolworths and Lowe’s, a US Home Improvement retailer) in relation to the proposed acquisition of Danks Holdings Limited by Carboxy.

The ACCC was concerned that the proposed acquisition would be likely to give Woolworths the ability and incentive to discriminate against some of its wholesale customers who are also its retail competitors. The ACCC was concerned that this would limit the ability of these stores to compete as effectively in local markets for the retail sale of various categories of hardware and home improvement products as they would have without the acquisition (that is, if Danks remained independent of Woolworths).

The ACCC was also concerned that the proposed acquisition would be likely to result in a reduction in the level of retail competition between some retailers supplied by Danks and some Woolworths ‘big box’ stores as compared to the situation without the acquisition.

The objective of the undertaking is to address these competition concerns. The undertaking removes certain barriers to Danks members exiting a Danks banner group or obtaining supply from other sources. Additionally, the undertaking alleviates concerns that Danks stores in close proximity to joint venture big box stores would be treated less favourably than other Danks stores.

Undertaking withdrawal

 On 2 October 2016 Metcash acquired Danks Holdings Limited (now called Home Timber and Hardware Group).

 On 1 November 2016 Woolworths Limited and Hydrox Brands Pty Ltd sought the ACCC’s consent to the withdrawal of the Undertaking pursuant to s 87B(2) of the Competition and Consumer Act 2010 (Act). In accordance with s 87B(2) of the Act, the ACCC gave consent to the withdrawal of the Undertaking in its entirety with effect from 20 December 2016. The ACCC’s reasons for consenting to the withdrawal of the Undertaking are set out in the attached document titled ‘Consent to Withdrawal of Section 87B Undertaking’.