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Aussie probe makes Borders decision

13.02.08

After a lengthy investigation the Australian Competition and Consumer Commission has said that it will not oppose the proposed acquisition of Borders' 24 Australian stores by A&R Whitcoulls, owner of Australia's largest bookshop chain Angus & Robertson.

The ACCC said that existing book retail chains, such as Dymocks and QBD, as well as department stores, small chains and independent book retailers would together prevent a combined Borders and A&R business from abusing its position in the market. "The ACCC reached the view that while each of these constraints is limited in its own right, the combination of these constraints is such that no substantial lessening of competition is likely in book retailing," it noted.

ACCC said it was concerned that Angus & Robertson would attempt to roll out its policy of pricing books above recommended retail price, but concluded that Borders had already implemented a similar policy, and that other book retailers could lower their prices and win customers if the merged business attempted to increase prices further.

The ACCC concluded that while there may be some shift in bargaining power between publishers and the merged entity, which may result in a small reduction in the number of books published, such a reduction was unlikely to constitute a substantial lessening of competition.

The decision does not mean that a deal will go ahead. "There are no further updates on transactions," an A&R spokesperson told the Australian trade website Bookseller+Publisher, "but all stakeholders will be informed in due course" of the next steps in A&R's offer.

Whitcoull's was given the go-ahead to pursue a deal for Borders in New Zealand by the country's competition authorities in November.

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