By Aimee Chanthadavong

Retailer associations and the federal government are working together to see enforcement action to be undertaken to address competition issues within the supermarket retail sector.

Taking lead is Minister for Small Business Bruce Billson who announced at the Australian Food and Grocery Council Leaders Forum that an independent review will be conducted to investigate complaints of anticompetitive and unconscionable conduct by the supermarkets towards their suppliers.

”The Government’s ‘root and branch’ review of Australia’s competition laws and policy presents a great opportunity for identifying areas where reforms could deliver more competitive markets and drive productivity in a win for business of all sizes and for consumers.

“The review will be an independent examination of how the competition framework is working, whether it is keeping up with emerging trends, and looking beyond the competition framework to identify impediments to competition with the goal of improving the living standards of all Australians.”

A similar stance has also been taken by Independent senator Nick Xenophon who made clear on his website that Australia’s supermarket industry is too closely controlled by Coles and Woolworths.

“There isn’t another country in the world where the supermarket industry is so concentrated,” he said.

“This level of market concentration is ultimately bad for competition and for consumers.”

Xenophon suggests a mandatory code of conduct needs to be introduced to cover the entire supply chain from supermarkets through to processors and producers. He also recommends a new laws needs to allow the Australian Competition and Consumer Commission the power to apply to the courts to break-up companies where market power has been abused.

Both of comments have been welcomed by retailers with Australian Retailers Association (ARA) executive director Russell Zimmerman expressing his enthusiasm to work with the new government to address the competition issue.

“Having recently met with Small Business Minister Bruce Billson, we were encouraged by his personal comments to us as well as his public announcements of support for the much-needed review of Australian competition laws,” he said.

“I have also sat down with Senator Xenophon and look forward to working with him to make sure the Senate keeps these very important issues at the front and centre of the political agenda. Today’s initiative by Senator Xenophon is helping to lead the case for change.
“The ARA is asking the Government to appropriately support the ACCC to ensure they are able to legally pursue competition outcomes through the courts with the best legal brains in the country to counter the resources of the big two.
“We will continue to work with the new Government and the ACCC on competition issues and to reduce business burden for the retail sector from tax to flexible wages. Again, we congratulate Minister Billson on his supportive statements this week on all of these issues.”

Meanwhile, the Australian National Retailers Association (ANRA), which represents both Coles and Woolworths, has called for focus to be put on the right policy settings to boost confidence and promote investment and jobs.

Margy Osmond, ANRA chief executive, said ANRA and its members support measures that will ensure the continuation of a fair and effective competitive environment for Australian business. 

“The strong competition already evident in Australia’s supermarket sector has meant lower prices for the Australian community,” she said.

“It is important to recognise that any additional red tape or regulation that limits competitive forces significantly increases the risk of higher prices.”