AUS: Woolworths criticises new M&A rules in Australia
The ACCC said: “We are particularly disappointed that Woolworths was not willing to reach an agreement"
Talks between Woolworths and Australia's competition watchdog over the creation of a streamlined acquisition process have collapsed with the retailer arguing it should apply to all industry participants.
A statement by the Australian Competition and Consumer Commission (ACCC) last week said it had reached an agreement on new rules for acquisitions with Coles for a six-month trial period, excluding acquisitions by Coles or DIY chain Bunnings in liquor or hardware.
As part of the agreement, the retailer would notify the watchdog of all acquisitions in exchange for "quicker pre-assessments and shorter timelines" for the first stage of a merger review.
However, the ACCC said no such agreement had been reached in any of the sectors with Woolworths.
"We are particularly disappointed that Woolworths was not willing to reach an agreement with the ACCC in supermarkets, liquor or hardware, particularly given the size of Woolworths existing store network and, most important, its evident growth plans," said ACCC chairman Rod Sims.
Sims said the proposed protocol was a voluntary arrangement and the major supermarkets were "perfectly entitled not to participate", but said suggested the watchdog would continue to monitor on Woolworths.
"What needs to be understood, however, is that the ACCC will continue to pay close attention to all acquisitions in the supermarket, liquor, hardware and fuel sectors by the major supermarket chains, including new greenfield store developments."
The move to introduce the protocol follows a crackdown by the ACCC on small retail acquisitions by the major supermarket chains in response to concerns about the continued expansion of both Woolworths and Coles.
According to the Sydney Morning Herald, the ACCC blocked Woolworths' acquisition of hardware stores in Ballarat and a hotel in Tasmania earlier this year.
A spokesperson for Woolworths said it had notified and co-operated with the ACCC for many years on acquisitions and would continue to do so into the future.
"We agree that acquisition processes need to be streamlined, however, the process should apply to all industry participants," the spokesperson says.
"In recent years, the substantial growth of Aldi, the entry of Costco and the growth of online retailing has further increased competition. It has also afforded consumers with substantial choice and increased their ability to switch to retailers who satisfy their particular requirements, most importantly on price," the spokesperson added.
"We will continue to discuss with the ACCC the dynamics of the Australian retail market as it continues to evolve."
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