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ACCC Raises Preliminary Concerns Over Bunnings-Adelaide Tools Acquisition

Bunnings side angle 725 x 500.jpg

The Australian Competition and Consumer Commission (ACCC) has raised preliminary concerns that the proposed acquisition of Adelaide Tools and Oaklands Mower Centre by Bunnings may lessen competition in the market for tools and outdoor power equipment in Adelaide. 

Adelaide Tools specialises in the sale of tools and outdoor power equipment through a chain of five stores and at the Oaklands Mower Centre in Adelaide.

Bunnings is the largest retailer of home improvement products in Australia and is also a major supplier of tools and outdoor power equipment to project builders, commercial tradespeople and construction firms.

In Adelaide, Bunnings is the largest seller of tools and outdoor power equipment by a significant margin, with its sales split between consumer and trade customers.

“Bunnings has a very powerful position in hardware, building supplies and home improvement. Since the exit of Woolworths’ Masters from the industry, Bunnings has grown rapidly and has become by far the leading player,” ACCC Chair Rod Sims said. 

“The ACCC considers that tools specialists, such as Adelaide Tools, are Bunnings’ closest and strongest competitors for the supply of tools and outdoor power equipment, particularly to trade customers.”

“Adelaide Tools is one of only two tool specialists with a physical presence in Adelaide, and competes strongly on price, innovation, range, and service quality,” Mr Sims said.

“Our preliminary view is that the proposed acquisition would stifle this competition.”

The other key tool specialist competitor in Adelaide is Total Tools, which has 81 stores nationally, six of which are in Adelaide.

The ACCC will further consider the extent to which other tool and outdoor power equipment retailers will constrain Bunnings and Adelaide Tools post-acquisition.

The ACCC also considered whether the proposed acquisition would give Bunnings increased purchasing power in the wholesale supply of tools in Australia. However, the ACCC considers that any increase in Bunnings’ national purchasing power is likely to be small and is therefore unlikely to substantially lessen competition in that market.

The ACCC has today issued a statement of issues outlining its preliminary concerns and invites submissions by 6 March 2020.

The ACCC’s final decision is scheduled for 23 April 2020.

Further information is available at Bunnings Group Limited - Adelaide Tools and Oaklands Mower Centre.

Source : ACCC

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17 February 2020

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