The Australian Competition and Consumer Commission has cleared Coles’ acquisition of leasehold interests for two new supermarkets in Mount Atkinson and Deanside, Victoria, on the condition that the retailer divests its nearby Kororoit site.
The ACCC said the divestment is necessary to preserve competition in the Melton Growth Corridor, where the three sites are located.
Without the undertaking, Coles would have controlled three supermarkets within close proximity, potentially limiting consumer choice in the area, the regulator noted.
Under the arrangement, Coles will sell the Kororoit site to Neale Deanside Developments, trading as Oreana, allowing a competitor to enter the market.
ACCC Deputy Chair Mick Keogh said, "Without the divestiture undertaking, the proposed acquisitions would have given Coles three supermarkets within close proximity to each other, in local areas with few alternative sites suitable for supermarkets and few existing competitors. In an area in which Coles already had a significant supermarket presence, we were concerned Coles would control most of the sites suitable for large format supermarkets within 5km of the target sites."
At the time of reporting, Coles’ share price was $21.74.