The Australian Competition and Consumer Commission will not oppose Wesfarmers $230 million acquisition of online retailer Catch Group, clearing the way for the deal to close.
The competition watchdog began a month-long review of the deal in June, shortly after it was announced, reviewing possible anti-competitive outcomes including impacts on retail supply, wholesale supply, and online services to third party sellers.
While both sell online, the ACCC does not view the two entities as “close competitors” because of differences in products and Wesfarmers stores being “predominately bricks and mortar”.
The ACCC also said it was satisfied with growth in new online marketplaces in recent years, such as Kogan and Amazon, and the new entity would still be sufficiently constrained in its dealings with third party sellers.
“We reviewed whether Wesfarmers’ retail position could be leveraged into online sales and marketplaces in an anti-competitive way,” ACCC Commissioner Stephen Ridgeway said.
“The current growth in online marketplaces is fostering competition between providers, and feedback indicated that Wesfarmers’ proposed acquisition of Catch would be unlikely to change that level of competition.”
“Stakeholders also consistently told us that Catch and Wesfarmers are not close competitors, primarily due to the differences in their business models,” Ridgeway said.
Wesfarmers had reportedly been considering launching its own multi-brand online retail platform to boost its online sales and compete with the likes of Amazon but saw Catch as a quicker, more cost effective avenue.
Catch Group runs two large fulfilment centres in Victoria which in peak periods ships more than 10,000 parcels a day. The company claims to have over 1 million customers and offers 1.9 million SKUs through its online marketplace. Catch Group owns Catch.com.au and sister sites Scoopon, GroceryRun and Mumgo.