By Aimee Chanthadavong

Australian Competition and Consumer Commission Chairman Rod Sims shared a regulator’s perspective on the debate surrounding market share held by the two major supermarket chains at the Australian Food and Grocery Council’s (AFGC) industry forum in Canberra on Wednesday.

According to Sims, this is a “healthy debate” for the industry, making clear the ACCC is aware its role is to only protect the competitive process and sees the current debate from a few angles.

“It is simply incorrect to label all those who question aspects of the degree of market power of the major supermarket chains as people wanting to protect inefficient businesses,” he said

“Second, we see the supermarket issues capable of being dealt with under the Competition and Consumer Act, and we do not see use of the Act as excessive regulation.”

“Indeed, effective implementation of the Act is vital for the success of our market economy. It provides clear and wide boundaries within which we can all benefit from the power of the profit motive.

“It is incorrect to argue that a market economy needs no regulation. It requires a modest amount of appropriate regulation to be effective, and this is what the Act provides."

In outlining supermarket issues which fit under the Act, Sims also provided an update and perspectives on supplier issues, the proposed code of conduct, shopper dockets, credence claims, mergers and safety issues.

“I am concerned about the escalating shopper docket petrol discounts, now reaching up to 45c per litre in some cases. I am also concerned that despite placing retailers on notice about our concerns, the behaviour has continued and indeed escalated,” he said.

“While they may provide short term benefits to some consumers, the likely harm to competition and the competitive process, and therefore to other fuel retailers and other consumers, may be quite substantial.

“The investigation is nearing completion and will be finalised shortly.”

Sims also explained the ACCC’s enforcement role and how it must always act on the basis of facts and evidence in taking court action.

“Our enforcement role, therefore, is not to be a decision maker. This is for the courts which are, of course, the ultimate umpire, as they should be.”

“Take our shopper docket investigation as an example where the ACCC’s role as an enforcement agency has been sometimes misunderstood.”
Sims said the ACCC has no power to ban shopper dockets, nor do we want the power to ban promotions.

“As an enforcement body, the ACCC can investigate market activity and, where appropriate, take court action seeking injunctions to stop conduct and seek penalties in appropriate cases.”