The ACCC has put a pause on ALH’s acquisition of the landmark Rye Hotel, amid competition concerns for patrons in the area.
The big Rye Hotel is an icon of Victoria’s Mornington Peninsula, providing public bar, gaming room, 43 accommodation rooms, and a thriving drive-through bottleshop.
ASX-listed Endeavour (ASX:EDV) agreed in June to purchase it from long-time owner Peter Houghton, for a price believed to be close to $50 million.
Beyond its Australian Leisure & Hospitality (ALH) fleet of nearly 340 pubs, Endeavour also owns leading retail chain BWS.
The BWS in Rye and the Thirsty Camel drive-through at the Rye Hotel, less than a kilometre away, are the two largest liquor stores in the area, and are typically each other’s strongest competitors.
This has prompted the Australian Competition and Consumer Commission (ACCC) to query the deal to buy the Rye, on the basis that it would “substantially lessen competition” in the town.
“We are concerned about this acquisition resulting in a substantial increase in Endeavour’s market share in the local Rye area.”
News of the inquiry dealt another blow to Endeavour’s share price, which fell almost a per cent, trading at an all-time low of $5.16 on Thursday. The company’s share value has fallen 15 per cent since its listing, mid-2021. Over the same period the benchmark index has dropped 3.3 per cent.
The ACCC notes that both residents of and tourists to Rye benefit from the competition, and it is inviting submissions and encouraging consumers to provide feedback to help it make its decision. The survey is to be completed by 6 October.
It’s expected the ACCC will issue its findings 30 November.
