If the competition regulator approves the sale of independent supermarket chain Supabarn’s supermarkets in Canberra/ACT and Sydney to supermarket chain Coles, allowing Coles to almost catch up with Woolworths in Canberra, it would decimate the remaining, mainly Metcash-supplied independent grocers in a market that already has Australia’s greatest floor space for supermarkets per capita.
In the ACT, Coles agreed to buy all of the Koundouris Group’s large Supabarn supermarkets at Civic (Canberra City), Wanniassa, Kaleen and Crace, as well as one under construction at Casey, all being close to or in adjacent suburbs to Coles and Woolworths supermarkets.
In Sydney, where Supabarn has five supermarkets, the sale of Annandale and Five Dock gives Coles entry to suburbs where the two majors do not have a large supermarket.
Woolworths has the lion’s share of the Canberra market (34%) with 17 stores, followed by Coles (at 18%) and eight stores, a much lower market share that it has nationally (28%), according to media reports.
Aldi has nine stores in the ACT with 8% market share, slightly higher than Supabarn’s share.
Supabarn’s four ‘Express’ stores in Canberra will remain in the group. The company released a statement saying its directors had decided to scale down for family reasons.
The Australian Competition and Consumer Commission said it will shortly commence a public review of Coles’ proposed acquisition of Supabarn supermarkets.
ACCC chairman Rod Sims said: “Given Supabarn’s position as a significant independent supermarket chain, an important focus of the ACCC’s review will be whether its removal as a competitor would substantially lessen competition between supermarket chains.”
The review will also examine each of the individual local markets in which the Supabarn stores operate, and any effect on grocery wholesaling and supply markets.
As part of its review, the ACCC will invite submissions from consumers, suppliers, supermarket operators and other interested parties and will be accepting public submissions until mid-July.