On 17 June 2009, the ACCC granted clearance to Woolworths Limited (Woolworths) to acquire Macro Wholefoods (Macro). Woolworths acquired the business and assets of Macro as part of its establishment of its new Thomas Dux Grocer business. Thomas Dux offers non-organic specialty products.
In its Public Competition Assessment, the ACCC defined the relevant markets as:
- local markets for the retail sale of organic food and grocery products (being within 3–5km from each Macro store), and
- state-wide or regional markets for the wholesale supply of organic food and grocery products.
The ACCC adopted a narrow definition of the relevant market as organic groceries rather than groceries in general. This definition was based on market inquiries which found that consumers do not view organic and non-organic retailers as close substitutes. The type of product rather than the store it is offered in is of primary importance to consumers. The ACCC concluded that organic retailers are more likely to exert competitive constraint on other organic retailers than on larger supermarkets or non-organic stores.
The ACCC concluded that the acquisition would not have the effect of substantially lessening competition in markets for the sale and wholesale supply of organic food and grocery products. Although Woolworths supermarkets and Thomas Dux stores sell some organic food and beverage products, the ACCC determined that there was limited overlap between these businesses and Macro’s specialist organic retail business, and the merging parties therefore exercised very little competitive constraint on each other.