ACCC raises concern over St Kilda acquisition by Woolworths

The Australian Competition and Consumer Commission has outlined concerns in a Statement of Issues (SoI) over a proposed acquisition of the St Kilda Renaissance Supa IGA by Woolworths Limited.

The ACCC believes the proposed acquisition may result in a substantial lessening of competition as it would remove the only independent full-line supermarket in the local market. Other than Woolworths and Coles, the St Kilda Renaissance Supa IGA is currently the only option for shoppers in the area to shop across the full supermarket product range at the same time.

“Market participants have expressed concern about the loss of the unique product offering of the St Kilda Renaissance Supa IGA,” ACCC chairman Rod Sims said.

“This offering currently brings together an extensive delicatessen and bakery, a wide range of fresh fruit and vegetables, specialty gourmet and health-food products, imported products and brands that are valued by customers, but not stocked by the major supermarket chains.”

The ACCC considers this product differentiation by the St Kilda Renaissance Supa IGA represents a competitor response to the offers of the rival supermarkets, providing additional choice to consumers. The ACCC is concerned that the proposed acquisition may lead to a significant reduction in choice for consumers.

“Also important, as there are no other Supa IGA stores in the broader area, the ACCC is concerned that the proposed acquisition would remove access to Supa IGA promotions for shoppers in this area,” Sims said.

The ACCC’s preliminary view is that the entry of an independent supermarket (or expansion by an existing independent operator) to replace the offering of the St Kilda Renaissance Supa IGA is unlikely in the foreseeable future.

The ACCC invites further submissions from the market in response to the SoI by 17 January 2014. The ACCC’s final decision will be deferred until 6 February 2014.