Lidl is once again trying to buy the Żabbar location currently being used as a Scotts supermarket, trying to get approval from Malta’s competition authority for the transaction after having been denied in the past.

The Office for Competition within the Malta Competition and Consumer Affairs Authority (MCCAA) has now opened an in-depth investigation to assess whether the proposed acquisition is in line with competition regulations.

The site is owned by Said Investments, and is leased out to its subsidiary, Scotts Limited.

Lidl, a German retailer operating in 31 countries, had already tried to buy the site in 2021, together with Scotts’ Burmarrad and Sliema sites. However, on that occasion, the Office for Competition had only greenlit the acquisition of the latter two sites, finding that the addition of the Żabbar location to the Lidl brand would “substantial lessen competition” in the area.

The Burmarrad and Sliema sites brought Lidl’s store count in Malta up to 10, while additional locations are also planned in Qormi (on the site of the former General Soft Drinks complex) and Żebbuġ (on the SMW Cortis site).

The Office for Competition has raised similar concerns about the latest attempt (which comes after an aborted attempt last year), saying in a preliminary 27-page report that it has “serious doubts” about the effect the acquisition would have on competition in the area, believing that “that it may limit competition in the grocery retail market, especially at the local level.”

The Żabbar site in question has a superficial area of 6,020 sqm, plus another 3,400 sqm site used for parking. Scotts is the third supermarket on the site (following Sisa and Pirella), which was previously used as a wedding hall.

Lidl and Said Investments are arguing that the former is just buying the property as a stand-alone asset, and not buying the Scotts business carried out at the Żabbar property. The transaction, therefore, does not involve the transfer of any going concern, personnel, goodwell, intellectual property, tradenames or trademarks, trade secrets, or customer databases.

Additionally, there are no limits imposed on Said Investments, which may indeed engage in activity that would compete with Lidl.

The Office for Competition, however, does not seem to agree, instead combining the proposed acquisition of the Żabbar site with the previous acquisition of the Sliema and Burmarrad properties once again, citing a legal provision stipulating that any market concentration occurring within the space of two years should be analysed as a single event.

Retail competitors have also objected to Lidl’s expansion to Żabbar, arguing that the German company already has a dominant position in the market. The addition of the location would “affect the viability of other players in the grocery retail industry and eroding consumer welfare because of potentially higher prices, diminished consumer choice, dominance in upstream markets and inferior quality of services.”

The authority ultimately decided that further investigation is necessary to arrive at a final conclusion, and has therefore launched an in-depth investigation into the possible effects of the transaction.