The competition watchdog’s head has given an indication that his mind is open to a possible Myer – David Jones merger.
Earlier this month, the Australian Competition and Consumer Commission’s chairman Rod Sims quashed media speculation that if a Myer – DJs hook-up was completed it would be sure to get the regulator’s green light.
However, speaking to the ABC’s AM program, Mr Sims says retailing has changed significantly over the past decade due to online and foreign competition entering the domestic market.
He says that makes a merger of Australia’s two remaining higher-end department stores possible under competition law, where it would have been unthinkable 10 or 20 years ago.
“I think they wouldn’t have considered it back then because they would have known there were problems. Now it’s something that will just require a very close examination,” Mr Sims said.
That is not to say a Myer – David Jones merger proposal would not have serious hurdles to overcome.
Mr Sims says there is a wide range of competition issues the ACCC would have to look at if a merger deal does arise.
“Many would say that they are each other’s closest competitor and therefore we’d have to look at to what extent do consumers rely on having all those products in the one place,” he said.
“There are many shopping centres where both David Jones and Myer are the anchor tenants, we’d have to see whether that’s a problem.
“Online shopping, we’d have to take into account whether new entrants could take the place of department stores if they were to merge.”
However, Mr Sims says the regulator has not investigated any of these issues, and will not do so unless there is a firm merger proposal agreed by the two companies.
“We don’t investigate speculative things, we only investigate real things, so we haven’t looked at it,” he said.
“There’s a number of dimensions that would have to be examined very closely because I think most people would think naturally that they are each other’s closest competitors, so it is problematic, but there is many dimensions to it.”