Automotive Holdings’ sale of its $45 million Covs Parts business has raised concerns at the consumer watchdog, which says the sale to rival GPC Asia Pacific would constrain competition in nine Western Australian regional towns.
The Australian Competition and Consumer Commission said market feedback on the planned sale indicated that GPC would be either the only supplier of auto parts, or one of two suppliers, in the regions.
The Covs Parts stores to be sold operate across 16 locations in metropolitan Perth, and the towns of Albany, Bunbury, Busselton, Esperance, Geraldton, Kalgoorlie, Karratha, Mandurah and Port Hedland.
GPC operates through its Repco and Ashdown-Ingram brands.
“The ACCC’s preliminary view is that the proposed acquisition would raise competition concerns in the supply of automotive parts and accessories to trade customers in nine regional towns in Western Australia,” ACCC chairman Rod Sims said.
“The proposed acquisition would remove GPC’s closest competitor in these regional towns, increasing GPC’s ability and incentive to raise prices or decrease service levels to trade customers.”
The ACCC said Covs Parts is the only other generalist automotive parts supplier of a scale and scope in regional Western Australia that matches GPC.
The regulator is asking for further submissions and is expected to make a decision by November 26.
Full content: Business Spectator
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