John Durie: ACCC to rule on Woolworths’ buyout of a local IGA as watchdog ponders creeping acquisitions

The ACCC this week will provide a key guidepost on its attitude to creeping acquisitions by big companies when it rules on the proposed Woolworths acquisition of an IGA in Karabar outside Queanbeyan in New South Wales.

The issue is a key one for small business, as the best hope of a lucrative payday is often when a big retailer like Woolworths buys them out. The flip side? Those businesses not acquired face a much tougher competitive environment when major players mop up a string of little stores in the same market.

This was a big issue back in 2008 when the ACCC rejected Woolworths’ attempt to buy the Karabar IGA, and it looks set to re-emerge this year with the ACCC separately looking at a string of acquisitions by Woolworths’ pub offshoot Endeavour, which wants to buy a number of hotels and bottle shops in Darwin and South Australia.

The regulator has delayed its decision due this month regarding Endeavour’s $11 million purchase of the landmark Beachfront Hotel in Darwin. Endeavour already has several establishments in town, so the question from the May purchase is whether it can have more — and what impact that has on competition.

The same issues are involved in this week’s decision on whether Woolworths can buy the IGA in Karabar, as Woolworths already has a store in neighbouring Queanbeyan.

A couple of things have changed in the surrounding NSW and ACT markets since the ACCC first rejected the bid 14 years ago, including the arrival of Aldi, which has about a dozen stores. There’s also not an obvious alternative buyer with the Koundouris clan going separate ways and not chasing market share for its Supabarn stores.

This week’s impending decision will also be watched against a clear trend for the ACCC to delay decisions almost indefinitely.

This happened recently with Qantas, which wants to buy Alliance Airlines.

Even though the issues have been under consideration for over a year the ACCC recently delayed its decision for the third time from December until March 2023.

The ACCC said it had not received the right information from Qantas, but the airline claimed it had supplied all the relevant details.

Both sides appear to be heading for a court showdown over the issue.