Coles' takeover bid decision deferred


THE Australian Competition and Consumer Commission (ACCC) will make a final decision next month on whether or not to give Coles the green light to take over the current Progressive Supa IGA in Halls Head.

The decision, set down for last Thursday, has been deferred to allow market participants the chance to comment on the proposal.

Under the plan, Coles would acquire four Progressive Supa IGA stores including Halls Head, Busselton and Bunbury in the State's south west and Dianella in Perth's north.

In the Statement of Issues, released on Thursday, the ACCC identified a number of issues with the proposal including the current monopoly national food retailers have in the areas.

"The proposed acquisition will remove the unique product offerings of [Progressive Supa IGA]," the report read.

"The ACCC is concerned that the proposed acquisition would replace the differentiated offer of Progressive Supa IGA stores with the offer of Coles, which is already present in each local market.

"The four Porgressive Supa IGA stores have a differentiated promotion, product range and service offering which represents a competitive response to rival supermarket chains and provides an additional choice to consumers.

"Given the markets are characterised by high barriers to entry, new entry at a sufficient scale to replace the lost competitive tension is unlikely."

But in a positive for Coles, the ACCC also found a number of barriers that worked in the national chain's favour including high capital costs for developing a new full service supermarket and a lack of potential sites available or coming up for development.

Should the Coles takeover go ahead in Halls Head, it would give Coles the second largest selling floorspace in the Peel region, second only to Woolworths' Mandurah Forum store.

The Progressive Supa IGA has 2770m2 of selling floorspace, eclipsing Coles' current stores in Mandurah Forum, Erskine and Meadow Springs.

If the acquisition goes ahead, Coles would own two out of five supermarkets with a selling floorspace of at least 1000m2 within a three-kilometre radius, and two out of eight such supermarkets within approximately five kilometres.

That would leave Peel residents with just the three IGA stores in Halls Head (Old Bridge), Mandurah and Miami and the Foodworks Halls Head as independent supermarkets.

According to the ACCC Coles already owns 756 supermarkets across Australia, 85 of which are in WA.

On top of the supermarket takeover, Coles is also proposing to add a Liquorland to the site, replacing the liquor store currently operated by Progressive Supa IGA.

That would leave 10 liquor outlets in the space of five kilometres including two BWS stores, two Dan Murphy's and five independent retailers including Bottlemart and Liquor Barons.

The ACCC will finalise its view on the matter after it considers market responses invited by the Statement of Issues.

Submissions are to be received by the ACCC no later than July 24 with a final view to be announced on August 14.

Submissions can be made at accc.gov.au

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