More than 300 dealers sign letter urging reconsideration of merger notification fees
The Australian Automotive Dealer Association has stepped up its campaign against the ACCC's mandatory merger notification regime, with a letter signed by more than 300 dealers asking the federal government to reconsider fees the association says are deterring dealership sales and acquisitions.
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Dealers escalate merger fee campaign
The Australian Automotive Dealer Association has sent a letter signed by more than 300 dealers to federal Treasurer Jim Chalmers and Assistant Treasurer Andrew Leigh, urging the government to reconsider the mergers and acquisitions fee structure as it applies to car retailers. GoAutoNews Premium reports that the association argues the rules rest on a false premise, because they judge the size of a car business by revenue, which is inflated by the sale price of every vehicle sold. Each dealer signing the letter employs up to 300 people, according to the report. 1
The letter follows months of lobbying by the AADA, which commissioned an independent report from BDO Australia presented to Treasury that described the costs of the regime as disproportionate. In its own announcement in July, the AADA called on Treasury to exempt family-owned and small to medium-sized franchised dealership transactions from the regime, or alternatively to create a low-cost, expedited approval pathway for the sector. 14
The Australian Financial Review reported in late July that car dealers consider themselves unintended victims of the merger oversight rules, warning that the rules capture small and medium family-owned businesses that pose no competition risk. The AADA's own research page for the BDO report likewise frames the issue as preserving viability rather than concentrating power. 75
The fee structure dealers are contesting
The mandatory regime, in force since 1 January 2026, requires businesses meeting turnover thresholds to notify the ACCC of proposed acquisitions and obtain clearance before deals proceed. GoAutoNews Premium, citing the BDO Australia report prepared for the AADA, details the filing fees: an initial waiver application costs $8300 plus substantial legal preparation costs; if the ACCC raises concerns and the deal moves to Phase 1, a further $56,800 applies; Phase 2 costs between $475,000 and $1,595,000 depending on deal value; and the Public Benefits Phase fee is $401,000. 137
BDO warned in its report that these fees, combined with legal and advisory costs, could be deal-prohibitive for regional and small operators where enterprise values may be as low as $2 million to $5 million, and said it had observed instances where legal costs exceeded the notification fee itself. The firm also flagged a cooling effect on viable transactions, five-to-twelve-week waiting periods during which deals are publicly disclosed on the ACCC register, and the risk that a seller unable to find a buyer willing to absorb the cost might surrender the franchise to the manufacturer. 3
Under the regime, non-compliance carries penalties of up to $50 million or 30 per cent of Australian group turnover, according to guidance circulated by the AADA in December 2025 ahead of the regime's commencement. The association warned at the time that the new rules would capture the overwhelming majority of dealership mergers and acquisitions. 6
Why dealers say turnover is a poor proxy
The dealers' letter argues that turnover is a poor measure of market power in automotive retail because a dealership can generate tens of millions of dollars in annual turnover while operating on modest margins and holding very limited market influence. GoAutoNews Premium reports the letter states the overwhelming majority of dealers hold less than 2 per cent of new car sales market share across a market with 67 vehicle brands, forecast by the industry to reach approximately 75 by 2031. 1
The letter also stresses that franchised dealers do not control vehicle supply, sales territories or many aspects of their commercial operations, with manufacturers retaining significant control through franchise agreements including approval of ownership transfers and network planning. AADA chief executive James Voortman made a similar point in July, saying franchise agreements, dealer network planning and ownership limits already shape dealership competition. 14
In a September interview with GoAutoNews Premium, Voortman said the regime was affecting whether dealers go ahead with buying or selling businesses, and that some members had reconsidered transactions when the commencement of negotiations became public. He argued that large transactions that previously raised competition concerns were adequately covered under the former voluntary arrangements. 2
Consolidation pressures and the path to review
The dealers' letter places the fee dispute in the context of broader industry change, citing the National Electric Vehicle Strategy, the Electric Car Discount and the New Vehicle Efficiency Standard as government initiatives requiring heavy dealer investment in EV charging infrastructure, workshop upgrades, diagnostic equipment, technician training and facility improvements, all while annual new vehicle sales remain broadly static at approximately 1.2 million vehicles. The AADA's July statement similarly identified the NVES, rising compliance obligations and increasing capital requirements as key drivers of succession and consolidation activity. 14
According to GoAutoNews Premium, the letter asks the government to review whether turnover is an appropriate measure of competition risk in a sector characterised by intense competition, significant manufacturer oversight and comparatively low margins. It is an industry request, not a confirmed policy change, and the government has not announced any amendment to the fee structure. 1
The timing of any reform is constrained by the legislative calendar. Voortman told GoAutoNews Premium in September that the first real opportunity for change would come with the statutory review of the merger legislation next year, when turnover thresholds are to be reviewed, saying the AADA would continue trying to educate the regulator and government in the meantime. The association has also cited the Peter Warren Automotive case as a recent example of regime friction, noting the ACCC initially knocked back the company's proposed purchase of Wakeling Automotive before approving it subject to the divestment of eight dealerships. 2
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7 cited pages across 3 websites
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- Dealers urge government to reconsider M&A feesRole not assessedSource extract saved
Why these labels?Dealers urge government to reconsider M&A fees
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Cited in 7 paragraphs: Dealers escalate merger fee campaign; The fee structure dealers are contesting; Why dealers say turnover is a poor proxy; Consolidation pressures and the path to review.
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- Dealer buyout rule examinedRole not assessedSource extract saved
Why these labels?Dealer buyout rule examined
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Cited in 2 paragraphs: Why dealers say turnover is a poor proxy; Consolidation pressures and the path to review.
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- Regulator charges huge buy-sell approvals feesRole not assessedSource extract saved
Why these labels?Regulator charges huge buy-sell approvals fees
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Cited in 2 paragraphs: The fee structure dealers are contesting.
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- AADA Calls for Merger Regime ExemptionRole not assessedSource extract saved
Why these labels?AADA Calls for Merger Regime Exemption
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Cited in 3 paragraphs: Dealers escalate merger fee campaign; Why dealers say turnover is a poor proxy; Consolidation pressures and the path to review.
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- Dealership Transactions in Australia's Franchise New Car ...Role not assessedSource extract saved
Why these labels?Dealership Transactions in Australia's Franchise New Car ...
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Cited in 1 paragraph: Dealers escalate merger fee campaign.
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- New Compulsory Merger Notification Guidance Document - AADARole not assessedSource extract saved
Why these labels?New Compulsory Merger Notification Guidance Document - AADA
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Cited in 1 paragraph: The fee structure dealers are contesting.
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- Car dealers say they are unintended victims of new ACCC merger rulesRole not assessedSource extract saved
Why these labels?Car dealers say they are unintended victims of new ACCC merger rules
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Cited in 2 paragraphs: Dealers escalate merger fee campaign; The fee structure dealers are contesting.
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