Petrol and pies in focus: ACCC sends Coles and Ampol to phase 2

Australia’s new merger regime came into effect on 1 January 2026, and the Australian Competition and Consumer Commission (ACCC) has wasted no time in directing some acquisitions to Phase 2. One is surprising, the other less so. 

Background 

Australia now has a mandatory and suspensory merger clearance regime for acquisitions above certain notification thresholds. For a more detailed overview of Australia’s new merger regime, read our previous article here. 

Under the new regime, notified acquisitions will be subject to a Phase 1 review during which the ACCC can determine whether the acquisition may be put into effect or whether the acquisition should go to a Phase 2 review.

During Phase 2, the ACCC will conduct an in-depth assessment of competition concerns. Most notified acquisitions are expected to be approved during Phase 1 (and so far that has largely been the case). 

In this article, we delve into the ACCC’s first forays into Phase 2. 

Case Study: Coles Acquisition of Lease in Kalgoorlie 

On 27 November 2025, Coles (Coles) notified the ACCC of a proposed acquisition of a leasehold interest for a supermarket and liquor site in Kalgoorlie (the Property). The Property is currently vacant with plans for development into a neighbourhood centre including a large format Coles supermarket of 2,800 square metres (Proposed Supermarket). 

The new merger notification thresholds place additional requirements on major supermarkets, requiring them to notify certain acquisitions regardless of whether they meet the revenue-based thresholds. These include land acquisitions (and leases) that meet certain size requirements. 

Based on the information provided in Phase 1, the ACCC concluded that the relevant area of competitive overlap was the retail supply of groceries in Kalgoorlie. However, in the context of a lease of vacant land for a developer (M Holdings 4 Pty Ltd), this seems a little odd. The ACCC was less concerned about the liquor store and took the view that it was unlikely to substantially lessen competition. 

In the context of the supermarket itself, the ACCC concluded that there were two theories of harm to be investigated further: 

1. Potential over-supply of supermarket capacity that could induce the exit of effective and likely smaller competitors; and
2. Coles creating, strengthening or entrenching market power. 

Over-supply of supermarket capacity: The ACCC acknowledges that the entry of new supermarkets will generally increase competition by expanding the options available to consumers and placing increased pressure on competitors to offer better prices, quality, product range and service. However, it also expressed the view that, post-merger, Coles, would have a high market share in a concentrated local market which could have adverse impacts on competition. In the Commission’s view, Coles’ acquisition could lead to an oversupply of supermarket capacity relative to consumer demand such that existing stores may become unprofitable. 

There even seems to be a suggestion that, Coles’ conduct may be directed at forcing a smaller competitor to exit. It will be interesting to see if any evidence of this can be identified. 

Substantial market power: The ACCC also considers that the acquisition could have the likely effect of substantially lessening competition by entrenching or strengthening a substantial degree of market power by raising barriers to entry and making it more difficult for existing or potential competitors to erode such market power. The Commission’s views are informed by its recent Supermarkets Inquiry, which was concluded in February 2025. 

Next Steps

Based on the reasons above, the ACCC decided that Coles’ acquisition of a lease for the Proposed Supermarket in Kalgoorlie requires an in-depth assessment to understand the likely impact it will have on competition. To that effect, the ACCC intends to investigate issues such as market concentration in Kalgoorlie, the likelihood and viability of new entrants to the market and whether the acquisition would give Coles substantial market power. 

The ACCC has 90 business days to complete its Phase 2 assessment and will make a determination by 12 June 2026. 

Case Study: Ampol Acquisition of EG Australia

In 2025, Ampol Retail Holding Pty Ltd (Ampol) lodged a notification and remedy offer with the ACCC regarding its proposed acquisition of 100% of the share capital in EG Group Australia Pty Ltd (EG Group Australia) and EG AsiaPac Holdings Pty Ltd (EG AsiaPac). EG Group Australia and EG AsiaPac are the entities that carry on EG Group’s business in Australia (EG Australia). Ampol offered to divest 19 Ampol and EG Australia fuel retail sites (Proposed Remedy).

Ampol and EG Australia are both suppliers of retail fuel, including petrol and diesel, and convenience products in all Australian states and territories. Ampol is vertically integrated and has fuel production and importing assets as well as wholesale supply and distribution facilities. In Australia, Ampol owns and operates 612 petrol retail fuel sites, (across two brands), while EG owns and operates 512 sites. Ampol is also EG’s exclusive wholesale fuel supplier. 

For the purposes of its Phase 2 review, the ACCC narrowed the markets for consideration and chose not to consider the issue of convenience grocery retailing co-located at fuel sites due to the extent of competitive constraint provided by alternative grocery retailers. 

In its phase 1 review, the ACCC identified 115 EG Australia sites where it concluded that, the acquisition could have the effect or likely effect of substantially lessen competition in the local markets where there is an overlap, as well as several metropolitan areas including Brisbane, Canberra, Melbourne and Sydney.

The ACCC considered that a radius of 3km was appropriate for assessing the competitive effects in metropolitan and major regional centres, with a 10km radius for other regional areas. The ACCC considers that, in many of the local markets, Ampol would have an estimated market share of 30% or more post-merger. 

With regard to metropolitan areas, the ACCC made preliminary findings that:

• EG Australia appears to be a significant competitor to Ampol;
• The pricing approaches used by the industry involve incorporating, and responding to, the prices of rival retailers at local area and metropolitan wide levels;
• In metropolitan areas, average prices at EG Australia owned and operated sites appear to be lower than Ampol owned and operated sites, excluding its U-GO Branded sites;
• Major retailers appear to have distinct price and non-price strategies compared to smaller retailers; and
• There appears to be a low likelihood of timely new entry or expansion. 

The ACCC also rejected Ampol’s Proposed Remedy on the basis that it:

• provided for divestures in the retail supply of fuel in 19 local areas, despite the ACCC identifying 115 local areas where the acquisition could substantially lessen competition;
• did not address potential competitive effects in metropolitan markets; and
• provided for ACCC pre-approval of a purchaser, without identifying that purchaser.

Accordingly, the ACCC will be required to make a determination by 9 June 2026 according to the merger assessment timeline. 

Key Takeaways

So, what can we take from these two decisions? 

• Firstly, the ACCC is not afraid to test the scope of its new powers.
• Secondly, market definition remains crucial, but market power is also in focus.
• Thirdly, cost-of-living concerns remain at the forefront with the focus on groceries and petrol. 

Acquisitions subject to Phase 2 review will incur a fee, ranging from $475,000 to $1,595,000 depending on the value of the transaction. That is unlikely to deter the acquirers in this case. On the other hand, broader political considerations may.

For more information, please contact Thomas Jones, Matthew Bovaird or Dylan McGirr. This article was written with the assistance of Tia Khan.