Malta’s competition regulator is not investigating Lidl’s plans to open new supermarkets in Żebbuġ and Qormi, a spokesperson for the authority has confirmed.

In recent weeks, the authority blocked the German supermarket giant’s plans to take over a Scotts supermarket in Żabbar, warning that Lidl would become too dominant in Malta’s southern areas.

But Lidl will not be facing any similar obstacles in the case of its upcoming Żebbuġ and Qormi outlets, since the plans do not involve taking over an existing supermarket.

The two planned branches lie just two kilometres apart, with an already-existing Lidl branch a further two kilometres up the road in Qormi.

If the plans come to fruition, there will be four Lidl branches within a seven kilometre stretch of road, from Żebbuġ to Luqa, bringing the total number of Lidl outlets across Malta and Gozo to 12.

Replying to questions sent by Times of Malta, a spokesperson for the Malta Competition and Consumer Affairs Authority (MCCAA) said that the authority’s approval is only required in cases that “fall within the scope of the Control of Concentration Regulations”.

In practice, this refers to cases in which a business is either taking over or merging with a competing business that operates in the same market, such as in the case of Lidl’s attempted purchase of Scotts in Żabbar.

“In the case of Żebbuġ and Qormi properties, the office considers that the assets in question do not constitute a concentration,” the spokesperson said.

Competition experts say that watchdogs such as the MCCAA have to tread the fine line between incentivising businesses to grow and safeguarding an even playing field for all operators in the market.

So, while the competition office is not necessarily against a company gaining a dominant position in its respective market, it steps in when it suspects that the business is exploiting its dominance to undercut the market or harm competitors, such as through predatory pricing.

The MCCAA spokesperson echoed this, saying that the office’s role is “not to prevent a business from growing, but to examine whether certain concentrations will be deemed notifiable by law (such as mergers, acquisitions, and joint ventures) will have harmful effects on competition”.

“If a concentration is considered not to harm competition, it is approved unconditionally. Conversely, if a concentration is found to harm competition, the notifying party may propose suitable commitments to eliminate the harm.”

Correction September 28, 2024: A previous version misstated Lidl's origin as Italian.