The Australian Competition and Consumer Commission (ACCC) has blocked GPC Asia Pacific’s proposed acquisition of the Covs Parts business from Automotive Holdings Group, claiming the move would substantially lessen competition.
“Repco and Covs Parts are the two largest generalist suppliers of automotive parts to trade customers in Western Australia and are each other’s closest competitor,” said ACCC Chairman Rod Sims.
“The removal of Covs Parts would likely result in a substantial lessening of competition.”
GPC, which distributes and retails automotive parts and accessories to customers in Australia and New Zealand through its Repco and Ashdown-Ingram brands, owns 36 Repco stores and eight Ashdown-Ingram branches in Western Australia.
Coves Parts has a network of 25 branches throughout WA and supplies a broad range of automotive parts and accessories, primarily to trade customers.
GPC’s proposal envisions acquiring the company that owns and operates Covs Parts stores across 16 locations in the greater metropolitan Perth region, and in the regional towns of Albany, Bunbury, Busselton, Esperance, Gerladton, Kalgoorlie, Karratha, Mandurah and Port Hedland.
Mr Sims said that the ACCC has made inquiries with a range of interested parties – including trade customers, dealerships, specialist automotive part suppliers and retail-focused automotive parts suppliers in Perth – and came to the conclusion that the proposed acquisition would adversely impact trade customers – especially in regional towns – who rely heavily on GPC and Covs Parts for their supply of automotive parts.
“Trade customers such as mechanic workshops have raised concerns that the proposed acquisition would result in GPC airing its closest competitor,” Mr Sims said, adding that the Commission would issue a public competition assessment in due course.
“In particular, the ACCC has received market feedback about the potential for the combined GPC/Covs Parts business to raise the trade prices of automotive parts.”