The Australian Competition and Consumer Commission (ACCC) has begun a review into the suggested purchase of Beaumont Tiles, the country’s biggest floor tile seller, by hardware giant Bunnings. The ACCC wants outside parties to make submissions on whether it may curb competition, according to a recent Australian Financial Review report.
Bunnings, owned by ASX-listed Wesfarmers, announced the acquisition in April with Managing Director Mike Schneider, vowing to run Beaumont Tiles as a stand-alone operation. With 115 Beaumont Tiles outlets nationwide, the ACCC claimed it would make a ruling on the procurement on August 5th, according to the report.
Bunnings is currently a substantial seller of floor tiles and the ACCC wants to know if the purchase of 115 Beaumont Tiles shops will curb competitors.
Frank Walker owns one of Beaumont Tiles’ biggest rivals, National Tiles, which has 38 shops as well as is progressively expanding.
National Tiles is about to open up a 2000 square metre display room in early June in the internal Sydney suburban area of Alexandria as well as a new shop in Hobart in July, according to the report.
National Tiles Executive Director of Sales, Advertising and Marketing, Campbell Stott said the group was in development mode.
“We are definitely wanting to grow our network,” he claimed. The team has 10 shops in Victoria and 10 in Queensland.
In a recent market inquiries letter on the proposed acquisition of Beaumont Tiles by Bunnings the ACCC has stated that that it was seeking the view of market players on how closely the two groups compete with each other in the supply of floor tiles, tiling accessories and bathroom ware.
It will also investigate what extent clients view other kinds of hard surfaces and flooring such as hardwood floorboards, vinyl and laminates as alternatives to floor tiles.
The competition regulator is seeking submissions from other players on what they expect the most likely impact would be on prices under the proposed acquisition. It is looking for submissions by June 4 and stated it anticipates to make a decision by early August.
Bunnings operated 380 hardware outlets, most of them in the ‘big box’ warehouse layouts and also has been hugely successful in raising profits over the past 15 months as the pandemic motivated householders to spend more on their homes through home improvements.
Beaumont Tiles has its headquarters in Adelaide run by the Beaumont family for 61 years. The Beaumont organization began in 1960 when Mr Beaumont’s dad started selling floor tiles to builders from a garage next to the family home in Adelaide.
At the time of last month’s procurement announcement, Beaumont Tiles stated the team’s CEO, Danny Casey, would stay at the helm of Beaumont Tiles and also its nationwide support workplace will certainly remain in Adelaide.
Bunnings experienced an arduous regulatory procedure for a previous procurement of Adelaide tools, a stand-alone organization in South Australia, and ultimately gained approval for the acquisition. The ACCC initially raised concerns about the influence on competitors.
Bunnings’ sales increased 24 per cent to $9.1 billion in the six months ended December 31, with same-store sales climbing up virtually 25 percent, while earnings jumped 36 per cent to $1.3 billion.
By Christine Bannister.