ACCC Objects to Woolworths’ Purchase of Karabar’s SUPA IGA

The Australian Competition and Consumer Commission (ACCC) has expressed its opposition to Woolworths’ planned purchase of the SUPA IGA supermarket in Karabar, NSW, along with its co-located Liquor Boss store. The regulatory body has determined that this acquisition would likely result in a significant reduction in competition within the local grocery supply market.

Gina Cass-Gottlieb, Chair of the ACCC, highlighted the potential consequences of the proposed transaction: “The proposed acquisition would see Woolworths operate three out of six supermarkets in the local Queanbeyan/Jerrabomberra area. Local consumers would be left with just one Coles and two ALDI stores as alternatives. We concluded that the removal of the SUPA IGA would likely result in a substantial lessening of competition in the area.”

Woolworths already operates two supermarkets in the neighboring suburbs of Queanbeyan and Jerrabomberra, and the SUPA IGA represents the only independent supermarket in the local vicinity. Cass-Gottlieb emphasized the importance of having multiple supermarkets in the area: “The more supermarkets or grocery stores there are, the better outcomes for local consumers, who can change where they shop based on the most competitive offerings for their particular needs.”

The retail grocery market in the Queanbeyan and Jerrabomberra area is already highly concentrated, and the addition of another Woolworths-owned store through this acquisition would further exacerbate this concentration.

Furthermore, the proposed acquisition would have an impact on the various suppliers currently providing products to SUPA IGA, particularly those whose products are not stocked by Woolworths.

The ACCC’s analysis took into account the distinct shopping experience offered by the independent and locally owned SUPA IGA Karabar, which differs from Woolworths, Coles, and ALDI. This unique shopping experience creates competitive tension in the local area, which would be lost if the supermarket were acquired by Woolworths.

Cass-Gottlieb explained, “Supermarkets compete not just on the price you pay at the checkout, but the frequency and types of promotions they run, the range of products they sell, the quality of these products, and the level of service delivered at the store. The local SUPA IGA competes with its different product mix, service offering and store amenity, and different promotional cycles. It also has the ability to make decisions locally and to dynamically adapt and respond to changes in tastes and preferences of local customers.”

The ACCC’s decision was based on an analysis of local consumers’ spending habits, including the frequency and amount spent at various supermarkets within and outside the local area.

Throughout the review process, the ACCC engaged with a variety of businesses and industry organizations. The regulatory body also sought feedback from consumers, with over 700 respondents participating in surveys or providing written submissions.

The SUPA IGA Karabar is an independent supermarket located in Karabar, NSW, which offers a range of groceries and liquor through its attached liquor store, known as Liquor Boss. Karabar is a small residential suburb situated approximately 2.5km from the town center of Queanbeyan, NSW, southeast of Canberra.

The SUPA IGA Karabar and Liquor Boss are owned by Karabar Property Pty Ltd, which is controlled by John Krnc, the owner of the Karabar Shopping Mall where these establishments are situated.

It is worth noting that the ACCC previously opposed Woolworths’ proposed acquisition of the Karabar Supermarket in 2008, which was under different ownership and operated under the “Supabarn” brand. Additional details regarding the ACCC’s 2008 merger

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