When the Federal Government designed its mandatory merger notification regime, it had market concentration in mind.
Supermarkets, airlines, banks.
Sectors where a handful of players can quietly tighten their grip on consumers through acquisition.
It is hard to imagine anyone in Treasury was thinking about a family-owned dealership in a regional town changing hands because the owner wants to retire.
Yet that is exactly the kind of transaction the new turnover thresholds appear likely to capture, according to an independent BDO Australia report commissioned by the Australian Automotive Dealer Association. The AADA is now asking for an exemption for small and medium franchised dealership sales, or at minimum a low-cost, fast-track approval path.
On this occasion, the dealer lobby has a point.
Franchised automotive retail is not a normal market. Competition between dealerships is already shaped, and in many respects constrained, by the manufacturers who sit above them. Franchise agreements, network planning and ownership caps mean a dealer group cannot simply buy its way to dominance even if it wanted to. The brand decides who sells its product, where, and under what terms.
Nor are dealership sales typically about market power. As AADA chief executive James Voortman says, they are about succession, viability and business continuity. The pressures pushing consolidation are well documented: the New Vehicle Efficiency Standard, manufacturer- mandated facility investment, rising compliance costs and margins that have thinned considerably since the post-Covid boom. A dealer selling up in that environment is not scheming to reduce consumer choice. In many cases they are securing the survival of the business and the jobs attached to it.
Adding a merger notification process, with the cost and delay that entails, to transactions that pose no realistic competition concern achieves nothing for consumers.
What it does achieve is another barrier to succession planning at precisely the moment the industry needs orderly generational change.
Regional dealerships, where buyers are already scarce, would feel it most.
There is a legitimate counterview.
Large dealer groups continue to grow, and regulators are right to keep an eye on genuine concentration in metropolitan markets. But the answer to that is a sensible threshold, not a net that catches every family business on its way out the door.
The Government has a review of the merger laws coming. Carving out small dealership transactions would be an easy fix, and the right one.
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