Australia’s competition regulator not to oppose Woolworths’ acquisition of Petstock

The Australian Competition and Consumer Commission (ACCC) has declared that it will not oppose Woolworths’ acquisition of 55% of Petspiration, the owner of the retail chain Petstock.

Officials concluded that it is unlikely for Woolworths, Australia’s largest retail group, to leverage its retail position into the specialty pet industry in an anti-competitive way.

“Market feedback indicated that specialty pet retail and grocery are distinct channels in the pet industry, and specialty pet retail stores have a very different product and service offering to supermarkets and discount department stores,” says the ACCC’s Chair Gina Cass-Gottlieb.

The ACCC accepted the pet retailer’s proposal to divest 41 specialty pet retail stores, 25 co-located veterinary hospitals, 4 brands and 2 online retail stores to Woolworths’ portfolio.

Petstock is Australia’s second-largest specialty pet retailer, with over 270 stores.

The investigation

The ACCC launched an investigation earlier this year after voicing concerns about the negative impact of the operation valued at AU$586 million ($392M) and some acquisitions by Petstock that the competition authority was not notified of.

Smaller competitors were concerned that this purchase would enable the retail giant to leverage its buyer power into pressuring suppliers to stock key specialty products in its supermarkets. The ACCC points out that most suppliers who supply both Woolworths and Petstock were not concerned.

Australian law firm Clayton Utz says the ACCC’s decision to “publicly investigate Petstock’s historical acquisitions of competitor stores” is “rare.”

The company explained that the move signals a “more interventionist approach to merger clearances by the ACCC, which is advocating for merger reform, including mandatory notification.”