Duopoly bill introduced into Parliament

by admin on June 18, 2013

Independent MPs have united to back a new bill that aims to reduce Coles and Woolworths’ market power.

Bob Katter, Nick Xenophon, and Andrew Wilkiem introduced a bill on Monday that would force the supermarket giants to sell businesses over the next six years until they controlled less than 20 per cent of the market, according to the Australian Financial Review.

The bill as posted on the Parliament of Australia website is as follows:

 

2013

 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 HOUSE OF REPRESENTATIVES

 REDUCING SUPERMARKET DOMINANCE BILL 2013

EXPLANATORY MEMORANDUM

Circulated by the authority of Hon Bob Katter MP

REDUCING SUPERMARKET DOMINANCE BILL 2013

OUTLINE

The Bill reduces the market share of Australia’s supermarket oligopoly by reducing the market share of supermarket businesses to 20% (via enforced progressive divestiture where necessary across a 6 year period). The Bill also establishes a Commissioner for Food Retailing to administer the limits on market share for supermarket businesses and to promote the competition and fairness principles, which include, inter alia:

  • the promotion of competition between supermarket business in the best interests of consumers and suppliers;
  • stopping supermarket businesses and household retail businesses from engaging in predatory practises that harm other businesses (whether or not supermarket businesses); and
  • stopping supermarket businesses, household retail businesses and intermediaries from engaging in unfair practices that harm suppliers.

Under successive governments, Australia has cultivated one of the most highl y- concentrated grocery markets in the world - estimated at beyond 80 per cent of market share – with this supermarket oligopoly taking almost 80c in every dollar spent on groceries. In Canada and the United States, a number of reports show their giant supermarket chains comprise only about 45% of the market share.

Australia’s supermarket giants are also opening oversized, unprofitable stores in growth areas and rural centres, which is killing off competition and obliterating local small businesses. There exists an under -reported impact on small businesses, employment and local communities across Australia, which substantially lessens competition in local markets. The rise of home brands is further squeezing out competition and reducing consumer choice. Supermarket suppliers, farmers and producers are reticent about criticising the supermarket giants, in fear of retribution.

This Bill provides powers to the Commissioner for Food Retailing to ensure that Australia’s colossal supermarket giants’ market share is progressively reduced to 20% of the total Australian supermarket market share throughout a 6 year period. It also addresses the supermarket giants’ intrusion into hardware, liquor and petrol retail markets, department stores, office supplies, licensed venues and gaming, plus operations in financial services, credit cards, coal mining, energy and investment banking. This Bill also aims to ensure that the supermarket giants’ vast operations in “household retail businesses” are progressively reduced to 20% total market share throughout a 6 year period. There is a clause to ensure that if operators have a smaller share of the supermarket market share in Australia, then businesses can have a bigger share of the household retail business market share. This will extend access to marke t- expanding tools, used by the supermarket giants, to independent stores.

 

The Commissioner for Food Retailing also has powers to ensure that the colossal supermarket giants treat suppliers fairly and lawfully, and do not engage in predatory practises which may lessen competition. The Commissioner also has the power to launch investigations into suspected breaches, including those arising from confidential complaints.

This Bill will restore a balanced supermarket share in order to promote competition and fairness principles for Australian businesses and consumers alike.

Website link: parlinfo.aph.gov.au

Previous post:

Next post: