The ACCC is going to investigate claims about why Kaufland decided to abandon its plans in Australia.
You may have seen that German retailing giant Kaufland has decided to pull out of Australia before it had opened a single door to customers.
It seemed like an odd decision. Why quit when you've put money into hiring hundreds of employees, choosing over 20 sites for stores and starting work on a distribution centre?
According to Australian Financial Review reporting, it wasn't just because Kaufland wanted to concentrate on Europe.
The Australian Competition and Consumer Commission (ACCC) is going to look into claims that major food suppliers were not going to supply Kaufland because they were worried about retribution from Woolworths Group Ltd (ASX: WOW) and Coles Group Limited (ASX: COL).
According to one supplier, Kaufland apparently saw that it wouldn't have been able to secure the best supply deals, which would have led to losses for a number of years for the retailer.
Speaking to the AFR, ACCC chairman Rod Sims said: "We'll definitely have a look at this. Agreements between competitors not to supply certainly raises cartel concerns and the law is pretty clear on this. Even if it's less than [cartel behaviour] you can also deal with it now under concerted practices.
"We would be extremely keen to talk to anybody who has any information about this, we have very sophisticated processes for protecting the identity of anyone who does come forward."
It remains to be seen which suppliers are being looked into, but it could relate to one or more ASX food suppliers as there are several large ones on the stock exchange.
Foolish takeaway
Coles, Woolworths and Metcash Limited (ASX: MTS) are definitely beneficiaries from Kaufland not opening. Margins will be higher than they would have been, but I don't think that any of them are going to be fantastic investments from here due to the low growth.
