The competition watchdog will review plans by supermarket giant Coles to buy nine Supabarn supermarkets in Canberra and Sydney.
The Koundouris family that founded Supabarn has decided to "scale down" the business for family reasons.
The Australian Competition and Consumer Commission says Supabarn is a significant independent chain, and an important focus of its review will be whether its removal from the market will substantially lessen competition between the major retailers.
"The review will also examine each of the individual local markets in which the Supabarn stores operate, and any effect on grocery wholesaling and supply markets," ACCC chairman Rod Sims said.
The ACCC will accept public submissions until mid-July.
Coles plans to buy five Supabarn stores in Canberra and four in Sydney.
Many of the supermarkets are a similar size to Coles and Woolworths outlets.
Four independently owned stores operating under the SupaExpress and Supabarn Express banners are not included in the proposed sale.
Coles said it intends to invest around $15 million to improve the Canberra stores and another $15 million on the Sydney stores.
Coles expects to add about 100 new jobs in Canberra and 80 new jobs in Sydney.
Existing employees at the Supabarn stores will be given the opportunity to continue working in the store for Coles.
