The consumer watchdog is concerned Woolworths' bid to take over a Queanbeyan independent supermarket and liquor store will "substantially lessen competition" in the area.
The supermarket chain wants to acquire SUPA IGA Karabar and Liquor Boss, owned by Canberra developer John Krnc, who also owns the Karabar Shopping Mall in which the stores are located.
The ACCC previously opposed a takeover of the same grocery store in 2008, when it was owned by Supabarn.
The two traders currently compete in supplying groceries to Queanbeyan residents, with Woolworths already running two stores within a 5km radius of the IGA.
ACCC commissioner Liza Carver said there was concern the proposed acquisition "is likely to substantially lessen competition in the supply of groceries in the local area".
"Within a 5km radius of SUPA IGA Karabar, it would reduce the number of operators of supermarkets with a significant size and range from four to three, leaving only Woolworths, Coles and ALDI," she said in a statement.
"We are also considering whether the acquisition raises similar concerns in relation to liquor stores, by removing the Liquor Boss as an independent competitor to major liquor store operators."
Beyond the potential to drive up prices in supermarkets and liquor stores, the regulator is also assessing whether a takeover could have a ripple effect on other IGA stores throughout the ACT and Queanbeyan.
The loss of the Karabar location could impact the "marketing efficiencies, awareness and competitive presence of other IGA", its statement of issues notes.
It is also interrogating the implications for Australia's largest independent grocery and liquor wholesaler, Metcash.
SUPA IGA Karabar is a customer of Metcash, and the ACCC is considering what impact the loss of this trade would have on Metcash's efficiency and competitiveness.
"Which in turn may reduce the ability of all independent supermarkets to exert competitive pressure on Woolworths post-acquisition," its statement notes.
In 2018, the ACCC raised concerns about the sale of the independent chain Supabarn to Coles.
The deal went ahead, but faced backlash from shoppers and other independent retailers.
The regulator wants to hear from interested parties about the proposed acquisition by January 12.
More information regarding submissions is available here.
A decision will be made by March 23.
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