ACCC flags concern over Woolies proposal

 

Supa IGA2The Australian Competition and Consumer Commission (ACCC) has released a Statement of Issues (SoI) outlining concerns with the proposed acquisition of the St Kilda Renaissance Supa IGA by Woolworths Limited.

The target supermarket is located at 64 Fitzroy Street in St Kilda, Victoria. The SoI seeks more information on competition issues that have arisen from the ACCC’s public review.

The ACCC’s preliminary view is that 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. 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,” ACCC chairman Rod Sims said.

The ACCC considers that 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.

Comments

1 comment

  1. randy ramano posted on January 8, 2014

    I live above the actual supermarket in question. Yes it is very nice to look at, it has electronic shelf prices and allot of expensive gourmet food. But it is very expensive, even though i live in an apartment in the same complex, i only shop there for small purchases. It is used purley as a big seven eleven with beer and wine. I dont understand why the ACCC would not allow myself the option to get my groceries at a much cheaper price. I currently walk down to coles and carry all my groceries home. Its ok for me , im in my 30s and a former professional boxer, but my 72 year old land lord who lives in the unit next to mine, has been assualted several times, groceries stolen etc on the same trip. Why does he have to risk his life getting food when he could simply catch a lift diwn stairs. The only winner if there is no safway allowed is the handful of extreamly wealthy shoppers who prefer to spend more , so as not to have to rub shoulders with us less fortunate People. reply

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