ACCC to not oppose the proposed acquisition by Woolworths of three Queensland Supa IGAs

The Australian Competition and Consumer Commission (ACCC) has announced that it will not oppose the proposed acquisition by Woolworths Limited (Woolworths) of three Supa IGA supermarkets, located in Queensland:

•  the Supa IGA supermarket located at Banksia Beach (Bribie Island)
•  the Supa IGA supermarket located at Rasmussen (Townsville)
•  the Supa IGA supermarket located at Riverside Gardens (Townsville

The proposed acquisition of these supermarkets is not, according to the ACCC, against section 46 “Misuse of market power”, of the Competition and Consumer Act 2010 (Cth). 

Misuse of market power test

To determine whether there has been a misuse of market power, the courts will consider three questions:

•  does the company have substantial market power?
•  is it taking advantage of that power?
•  is it using the power for an illegal purpose?

The possession of market power of itself is not unlawful.

“After a thorough investigation, the ACCC concluded that the proposed acquisitions would not result in a substantial lessening of competition in any market and are unlikely to reduce consumers’ choice or eliminate a vigorous competitor in the relevant local markets,” ACCC Commissioner Dr Jill Walker said.

In the local markets surrounding the Banksia Beach and Rasmussen stores, local residents would be able to access other Supa IGA stores. The ACCC’s inquiries regarding the Riverside Gardens store indicated that local residents do most of their grocery shopping at larger stores in nearby shopping centres. The ACCC also took into account the lack of alternative buyers for the Banksia Beach and Riverside Gardens stores.

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