The hardware giant Bunnings is facing accusations of being anti-competitive after it was revealed it is trying to take over Mitre10 sites. This is an issue that has been brought to light by Metcash CEO Scott Marshall, who is the chief executive of the Australian wholesaler that supplies 4000 IGA supermarkets and Foodland stores, as well as Mitre10.
He has expressed concern that “major chains acquiring” independent stores “to increase their market power to the long-term detriment of consumers.”
The criticism comes as Bunnings, owned by Wesfarmers, has expressed an interest in acquiring Mitre 10 stores in Australia. This move is seen as a way for Bunnings to increase its market share and extend its reach into regional areas where Mitre 10 is the dominant hardware store.
The issue of anti-competitive behavior has been a long-running concern for Metcash, which has been competitively disadvantaged by Bunnings’ aggressive expansion into retail outlets in Australia. The move also has implications for other independent hardware stores, which could be forced out of business if Bunnings acquires Mitre 10 stores.
At the Senate inquiry into the cost of living, Mr Marshall disclosed Bunnings’ CEO Mike Schneider had contacted at least seven Mitre10 owners in the current year to inquire about acquiring their stores.
Over the past nine years, it has been noted that 22 large-format, high turnover grocery and hardware stores have been acquired by large corporates, thus making it more difficult for independent businesses to compete.
Mr Marshall suggested stricter competition laws could assist in reducing the escalating cost of living by prompting retailers to be more aggressive in their pricing.
“We believe that the federal government can assist us in the area of competition law, as we are greatly worried about the large chains purchasing our independent stores to bolster their market power and consequently negatively affect consumers in the long run,” he said.