This letter outlines what interests the ACCC in its consideration of the takeover of Ovato Retail Distribution by Are Media:
Dear interested party,
Request for submissions: Are Media Pty Limited’s proposed acquisition of Ovato Retail Distribution Pty Ltd
The Australian Competition and Consumer Commission (ACCC) is seeking your views on the proposed acquisition of Ovato Retail Distribution Pty Ltd (ORD) by Are Media Pty Limited (Are Media) (proposed acquisition).
Are Media is the largest magazine publisher in Australia and ORD operates the largest retail distribution network for print magazines in Australia. Further details regarding the acquisition can be found at Attachment A.
The ACCC’s investigation is focused on the impact on competition. In particular, we are seeking your views on:
- The presence of alternative retail distribution networks for print magazines, and the ability for customers to switch between alternative retail distribution networks.
- The likelihood of a price increase for retail distribution of magazines if the proposed acquisition proceeds.
- The ability and incentive for a combined Are Media/ORD to foreclose or discriminate against competing magazine publishers seeking retail distribution services.
- The extent that the magazine industry is in economic decline and if so, whether the industry is likely to recover in the next three years.
- The potential expansion of existing distribution networks (for example, newspaper distribution) into the retail distribution of magazines.Further issues you may wish to address are set out in Attachment B.
This matter is public and you can forward this letter to anybody who may be interested.
The legal test which the ACCC applies in considering the proposed acquisition is in section 50 of the Competition and Consumer Act 2010. Section 50 prohibits acquisitions that are likely to have the effect of substantially lessening competition in a market.
Please provide your response by 5pm on 8 July 2021. Responses may be emailed to mergers@accc.gov.au with the title: Submission re: Are Media/ORD – attention Sophia Liu / Will Sommers. If you would like to arrange a time to discuss the matter with ACCC officers, or have any questions about this letter, please contact Sophia Liu on (03) 9290 1437 or Will Sommers on (03) 9910 9444.
The takeover presents challenges for newsagents, independent publishers and consumers. It will be interesting to see if there are submissions on these matters.