The Australian Competition and Consumer Commission has raised its concerns over Woolies taking over the Hawker shops:
The ACCC’s preliminary view is that the proposed acquisition may result in a substantial lessening of competition in the local supermarket market.
The ACCC considers that the proposed acquisition would remove the unique offering of the Hawker Supa IGA from the local market. In particular, the Hawker Supa IGA is the only full-line independent supermarket in the local market, and is the only Supa IGA in north Canberra.
“Market inquiries have indicated that the Hawker Supa IGA differentiates its offerings from its competitors in terms of price, product range and service. This differentiation represents a competitive response to the offer of rival supermarkets, providing additional choice to consumers,” ACCC Chairman Rod Sims said.
The proposed acquisition would replace this differentiated offering with a standardised Woolworths offer, which may lead to a significant reduction in choice for consumers.
The ACCC also considers that this competition is unlikely to be re-introduced into the local market because of high barriers to entry in the local market, including regulatory limits on development and expansion of supermarket sites.
That last par is interesting as those regulatory limits are supposed to be improving competition.