The competition watchdog has given the green light to Woolworths Ltd's acquisition of organic supermarket operator Macro Life Pty Ltd.
The acquisition is unlikely to substantially lessen competition in the retail and wholesale organic food and grocery markets due to key differences in the companies' product offerings, the Australian Competition and Consumer Commission (ACCC) says.
The acquisition, announced in May for an undisclosed price, will see Woolworths acquire up to nine store leases from Macro and re-badge up to eight of them as Thomas Dux Grocer stores - Woolworths' premium supermarkets.
Currently the grocer has two Thomas Dux stores at Lane Cove and Paddington, both in NSW.
Organic products are only a small component of the range in Woolworths' Thomas Dux Grocer stores and comprise less than one per cent of sales in Woolworths' supermarkets, acting ACCC chairman Peter Kell said in a statement.
By contrast, Macro focuses almost entirely on organic products, is less competitive on price and its closest competitors are smaller, independent retailers with a similar focus.
"These competitors will remain in the market after the acquisition, continuing to provide consumers with a choice," Mr Kell said.
If the acquisition was blocked, Macro was unlikely to operate as a strong competitive force in future due to its "declining financial position", the regulator said.
The ACCC said the acquisition would have little impact on wholesale markets and Woolworths' would not be able to significantly influence prices after its planned launch of the Macro brand as a private label.
© 2009 AAP
