Lead
The Australian Competition and Consumer Commission (ACCC) has blocked the development of a new Coles supermarket in Kalgoorlie-Boulder, citing the likelihood that it would knock out smaller competitors in the area. The decision, described as unprecedented, marks the first time the consumer watchdog has exercised new powers to prevent a supermarket from opening.
Coverage Comparison
Two reports from ABC Australia detailed the ACCC's ruling, emphasizing different angles. One report focused on the decision's local business implications, highlighting the concerns of local officials and business leaders. The other framed the move as an unprecedented use of the ACCC's new powers to monitor supermarket competition, with a more formal tone. Both reports underscored the potential harm to competition as the primary basis for the decision.
Key Claims
The ACCC's decision, announced today, was based on the conclusion that the acquisition of a site near Kalgoorlie's airport would likely have the effect of substantially lessening competition in the market. According to the consumer watchdog, the new store would have given Coles a market share of about 40 percent in Kalgoorlie-Boulder. ACCC deputy chairman Mick Keogh said, "When we looked in a great deal of detail at this transaction, it would likely have resulted in one of the independents leaving the market."
Kalgoorlie-Boulder, located roughly 600 kilometres east of Perth, has a population of around 30,000. The town already has six supermarkets, including a Coles in the CBD, a Woolworths, two franchised IGAs, and two independent grocers. Local officials argued that the population does not justify another supermarket. Kalgoorlie-Boulder Chamber of Commerce and Industry CEO Simone de Been said, "We are pro-development when it is needed but the chamber doesn't think that we need a second Coles in that location when there is already an existing IGA in place to service that area. There are six supermarkets in Kalgoorlie-Boulder already and our population really hasn't grown that much." She added that the recent opening of Spudshed means another supermarket would likely force a closure.
Coles, which operates 860 supermarkets nationwide, expressed disappointment at the decision, saying it underestimates Kalgoorlie-Boulder's future growth. The company is considering its options, which could include an appeal.
The ACCC also considered the fly-in, fly-out (FIFO) population in Kalgoorlie-Boulder but concluded that it does not alter the relevant product dimension of the market. This decision was made under the new notification and assessment powers the ACCC has been given to monitor supermarket competition.
Perspectives
ACCC: The watchdog determined that the new supermarket would likely harm competition, potentially driving one of the independent supermarkets out of business.
Coles: The company expressed disappointment, arguing that the decision underestimates the region's future growth and is considering an appeal.
Local Chamber of Commerce: The Chamber of Commerce and Industry supported the decision, stating that the existing number of supermarkets already serves the population adequately.