Woolworths ditches agreement with ACCC on retail acquisitions

Woolworths has abandoned talks with the Australian Competition and Consumer Commission to establish a streamlined assessment protocol for supermarket acquisitions, including new supermarket developments.

Coles has reached agreement to the protocol for a six-month trial period excluding acquisitions by Coles or Bunnings in liquor or hardware.

Coles will notify the ACCC of all acquisitions in exchange for quicker pre-assessments and shorter timelines for the first stage of a merger review.

The proposed protocol follows a crackdown by the consumer watchdog on incremental small retail acquisitions by the major supermarket chains in response to concerns about the continued expansion of Woolworths and Coles in various sectors.

The ACCC and Woolworths have repeatedly butted heads, with the regulator recently opposing several supermarket acquisitions.

This year the ACCC blocked the Woolworths acquisition of hardware stores in Ballarat and a hotel in Tasmania.

Despite not playing ball on the protocol, Woolworths will continue to notify the ACCC of certain types of transactions as it has previously done, primarily acquisitions of existing stores but with expanded up front information, at Woolworths’ discretion.

ACCC chairman Rod Sims indicates the regulator would be applying the blow torch to Woolworths.

“We are particularly disappointed that Woolworths was not willing to reach an agreement with the ACCC in supermarkets, liquor or hardware, particularly given the size of Woolworths existing store network and, most important, its evident growth plans”, he says in a statement.

“The protocol was a genuine attempt by the ACCC to significantly expedite the acquisition assessment process.”

Sims says the proposed protocol was a voluntary arrangement and the major supermarkets were perfectly entitled not to participate, but he warned the watchdog would keep a close eye on Woolworths.

“What needs to be understood, however, is that the ACCC will continue to pay close attention to all acquisitions in the supermarket, liquor, hardware and fuel sectors by the major supermarket chains, including new greenfield store developments,” he says.

“The ACCC will do this not only through notification by the major supermarket chains and the ACCC’s own monitoring activities but, importantly, through information received from the market.”

A spokesperson for Woolworths told SmartCompany the supermarket had notified and co-operated with the ACCC for many years on acquisitions and would continue to do so into the future.

“We agree that acquisition processes need to be streamlined, however, the process should apply to all industry participants,” the spokesperson says.

The spokesperson indicates that Woolworths objected to the exclusion of Aldi and Costco from the protocol.

“In recent years, the substantial growth of Aldi, the entry of Costco and the growth of online retailing has further increased competition,” the spokesperson says.

“It has also afforded consumers with substantial choice and increased their ability to switch to retailers who satisfy their particular requirements, most importantly on price.”

The spokesperson says Wooloworths would continue to discuss “the dynamics of the Australian retail market as it continues to evolve” with the ACCC.

“More than ever, helping retailers to lower the price of goods and services, and not adding more red tape and obstructing the very real competitive forces, is what regulators and all stakeholders should be aiming for.”

Trending

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments