Alsco’s Spotless Garments acquisition raises preliminary competition concerns

Competition watchdog raises concerns about Alsco's proposed acquisition of Spotless Garments.

The ACCC has preliminary competition concerns about the proposed acquisition by Alsco of Spotless Laundries’ garment laundering business, Spotless Garments.

Spotless Garments is part of Spotless Group Holdings Limited, which is is wholly-owned by Downer EDI Limited.

Alsco and Spotless Garments both offer commercial laundry services for garments in multiple states and territories across Australia.

“This transaction combines the two largest garment laundry suppliers in most states and the only two major suppliers with a presence across the country,” ACCC Commissioner Stephen Ridgeway said.

The ACCC’s preliminary view is that Alsco and Spotless Garments are each other’s closest competitor.

“Alsco and Spotless Garments operate in an already concentrated industry, and few other garment laundry suppliers provide these services with a similar scale and geographic reach,” Ridgeway said.

“The ACCC is concerned that this transaction will remove an important constraint on Alsco. Garment customers that operate across Australia with large volume requirements will have no comparable alternatives.”

The ACCC’s investigation found that potential entrants may be unwilling to enter into garment laundering, while small existing suppliers may face difficulties in expanding, due to material upfront costs.

The ACCC will explore whether existing suppliers and linen focused laundry suppliers would constrain Alsco post-acquisition before a final decision is made.

The ACCC has published a statement of issues and is seeking further information.

The ACCC is inviting submissions by Friday 30 October 2020.

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