The Australian Competition and Consumer Commission has given Woolworths the thumbs up to acquire the Supa IGA supermarket in Hawker, Australian Capital Territory.
ACCC chairman Rod Sims said after extensive investigation the ACCC concluded the acquisition would not result in reducing competition in the market.
“The ACCC found that the local market included several supermarket offerings. Within this market, the Hawker Supa IGA’s closest competitor was a Coles supermarket at the nearby Jamison Centre, which also has an ALDI. The local Woolworths supermarkets are more distant competitors,” he said.
Initial market feedback had suggested the Hawker Supa IGA provided a strongly differentiated offering on non-price factors such as its product range and service. The ACCC commissioned customer surveys to test whether this product differentiation was so strong that, taken with other factors, the removal of the Hawker Supa IGA as an independent rival in the market could lead to a substantial lessening of competition.
“The customer surveys showed that while non-price aspects of the Hawker Supa IGA offer were valued by consumers, only a small proportion of survey respondents said an aspect of the Hawker Supa IGA’s range, service or pricing was the most important reason they shopped there. Most customers used the Hawker Supa IGA as a limited part of their overall grocery shopping, and despite its product differentiation, the Hawker Supa IGA drew very few customers from outside the suburbs immediately surrounding it,” Sims said.
“So while the loss of this differentiated offer from the local market will involve the loss of some competition, the ACCC has formed the view that it does not reach the threshold of a substantial lessening of competition required under s.50 of the Competition and Consumer Act.”