The Endeavour Group Ltd (ASX: EDV) share price retreated to a new all-time low today.
It was a tough day across the Australian share market. All sectors felt the pinch as the S&P/ASX 200 Index (ASX: XJO) neared a 10-week low. Unfortunately for Endeavour Group, general gloominess spurred on by interest rate expectations wasn't the only sentiment suppressant on Thursday.
Shares in the alcoholic drinks retailer declined 0.95% to $5.21 amid concerns raised by the competitive watchdog. The company's shares traded at a low of $5.16 throughout the day.
Since listing in June 2021, the Endeavour share price has fallen 15%. For comparison, the benchmark index has slipped 3.3% lower.
Why the Endeavour share price was stumbling
The Australian Competition and Consumer Commission (ACCC) announced preliminary concerns surrounding Endeavour's proposed acquisition of the Rye Hotel.
Located in Victoria's Mornington Peninsula, the Rye Hotel encompasses 43 rooms for accommodation, gaming areas, a bar, and a drive-through bottle shop. A successful acquisition of the family-owned establishment would carve out a significant position for Endeavour in the region.
However, the regulator has pointed to the deal's potential to reduce competition for local beverage buyers. The other major liquor store in the area is BWS Rye, owned by Endeavour Group.
ACCC Commissioner Stephen Ridgeway explained the concerns, stating:
The BWS Rye and the Rye Hotel Thirsty Camel are the two largest liquor stores in the local area with a comparable size and product range, and are likely to be each other's strongest competitors.
We are concerned about this acquisition resulting in a substantial increase in Endeavour's market share in the local Rye area.
From here, local consumers and holidaymakers can provide input into the ACCC's findings. A survey is being made available to these people, which will be available up to 6 October 2023. The regulator expects to produce its findings on 30 November.
Not its first rodeo
Endeavour Group has worked with the ACCC before to find a happy medium. In December 2022, the company revised four South Australian hotel acquisitions to move forward with an altered version of its original deal.
The listed giant opted to divest a BWS bottle shop and drop two out of the four acquisition targets to move forward. Shareholders will be eagerly watching to see what Endeavour proposes this time around to find a compromise.
Based on the current Endeavour share price, the company offers a dividend yield of approximately 4.1%.
