Retail giant Coles challenges ACCC’s objection to new Kalgoorlie supermarket, seeks tribunal review

Coles is appealing a decision by Australia’s competition watchdog to block its acquisition of a lease for a new supermarket and liquor store in Kalgoorlie.

The Australian Competition and Consumer Commission ruled earlier this month that the proposal could substantially lessen competition in the Goldfields city, marking the first time it had used new merger control regime powers.

Coles swiftly hit back, saying the ACCC had “underestimated Kalgoorlie’s future growth and demand” and pointed to its population — just over 20,000 — and its massive fly-in, fly-out workforce.

On Thursday, the retail giant said it had lodged an application with the Australian Competition Tribunal, seeking review of the regulator’s decision.

“Coles respectfully disagrees with the ACCC’s assessment and remains of the view that the proposed development would not substantially lessen competition in Kalgoorlie,” a spokesperson said.

“Coles also considers that the issues raised by the determination may have broader implications for future supermarket developments under the new merger regime.

“Coles believes the proposed development would have afforded Kalgoorlie shoppers greater choice and convenience, delivering clear benefits.”

When the ruling was handed down on July 2, ACCC deputy chair Mick Keogh agreed a new Coles supermarket would offer benefits to some consumers.

But he said there was “a real prospect that the acquisition would lead to the exit of an effective independent competitor, and its assets leaving the market”.

“New entry would not be timely enough and sufficient to offset the loss of competition likely to result from the acquisition,” Mr Keogh said.

Kalgoorlie already has four supermarkets — one run by Coles, another by rival Woolworths and two independents.

But Coles argues that even with its new proposed store at 95-106 Great Eastern Highway in Somerville, supermarket capacity in Kalgoorlie would be lower than, or comparable to, similar regional centres such as Albany, Busselton and Geraldton.

“Coles’ business case for this store does not rely on any existing operator leaving the market. Rather, it assumes continued growth among competitors over time,” the spokesperson said.

As part of the biggest change to Australia’s merger laws in 50 years — which kicked in on January 1 — the ACCC can approve an acquisition as quickly as 15 business days after notification if there is no evidence it would lessen competition.

If the deal isn’t cleared under phase 1, it proceeds to phase 2, which takes up to another 90 business days and comes with an $855,000 price tag, which Coles is now facing.

Coles also operates three Liquorland stores in Kalgoorlie.