ACCC reviews Coles proposal to acquire 9 Supabarn supermarkets

The Australian Competition and Consumer Commission has reviewed and released a Statement of Issues on Coles’ proposal to acquire nine Supabarn supermarkets in NSW and ACT.

The ACCC organised a consumer forum to gather feedback from customers on whether the acquisition of Supabarn supermarkets should be allowed. The event was conducted on Aug. 3, 2015 in Canberra, where several consumers registered. The main aim of the forum was to gain awareness of the opinion of the customers on Coles’ proposal.

The regulating body received around 60 submissions on the proposed acquisition from the customer feedback. “The ACCC recognises that Supabarn has a differentiated offer to that of the other supermarkets and understands that this is valued by consumers,” ACCC Chairman Rod Sims said. In addition, Sims claimed that the removal of the supermarket, such as Supabarn, may affect consumer tastes and preferences, thereby hampering the market conditions.

“The ACCC is closely examining the effect of removing a supermarket chain with a differentiated offer from the market. In particular, Supabarn is the only full-line supermarket chain in the ACT other than Coles and Woolworths. The ACCC is concerned that Supabarn’s removal may lead to significant competitive harm and loss of choice for consumers,” he said.

The Commission, however, found that there are smaller supermarkets that operate in the ACT region, but there is no complete supermarket chain available for customers. Sims mentioned that the market condition of areas where Supabarn and Coles stores, which are owned by Wesfarmers, are located nearby has been examined. After proper examination, it has been learnt that there is limited competition from other supermarkets where these two are located.

Areas like Sans Souci and Sutherland in NSW, as well as Casey in the ACT, where Supabarn has planned to launch its largest store, are main concerns of the ACCC as far as local retail markets are concerned.

The ACCC claimed that the Statement of Issues is not the final decision. It only contains the views of the commission on the proposal. The commission aims at inviting parties to provide more information and assist in making an assessment-based decision on the matter.

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