Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Monday, 9 December 2013
Page: 2119

Mr CRAIG KELLY (Hughes) (19:33): I rise tonight to express my concern and my disappointment at the undertakings that the ACCC has accepted from the supermarket duopoly. For the best part of this year the ACCC had been investigating the shopper-docket schemes used by our major supermarkets for fuel discounts. The ACCC had serious concerns that these were anticompetitive. I have spoken in this place before to put on the record that I believe this is truly anticompetitive and against the best interests of competition and the Australian consumer. What the ACCC has actually done is effectively agree to a plea bargain with our major supermarket chains. What they have accepted is that our two major supermarkets will voluntarily cease making fuel-saving offers, which are wholly or partially funded by any part of their business other than their fuel retailing arm, and will, in addition, limit fuel discounts which are linked to supermarket purchase to a maximum of four cents a litre.

This is a golden opportunity that the ACCC has missed that would truly expose how detrimental to the Australian consumer and the Australian small business community these shopper dockets are. We believe that competition is important and shopper dockets are anticompetitive. It is competition that drives innovation, that creates the new industries and the new products that are so necessary for our future prosperity. It is competition that keeps prices down for consumers. Where one company is able to cross-subsidise their participation in an unrelated market, as happens with shopper dockets, it simply distorts competition completely. We want to see a marketplace where the most efficient producers are the most successful. It is not about protecting competitors; it is about making sure the most efficient companies come to the forefront.

Deputy Speaker, I put it to you that if you were a small, independent petrol retailer—and perhaps one of the most efficient independent retailers of petrol that there could be—you could not possibly compete fairly if your competitor cross-subsidised and sold underneath your cost price by being able to leverage profits from a market where they did not face as much competition. An analogy from the sporting field is appropriate. If you have a boxing match with two competitors, you have a fair contest, but cross-subsidisation would have one competitor sit out several rounds, bring on another fighter to fight those rounds and then have the original fighter come back in. That is not a level playing field. Or, if one team in a rugby game was able to bring extra players onto the field, that would be exactly the same as the cross-subsidisation through the shopper dockets.

One of the reasons that it is truly anticompetitive is that the very source of our supermarkets' market power comes through special privilege and government protection. I have seen this in the electorate I represent. There is a shopping centre called the Warwick Farm Homemaker Centre, where the courts of this land have ruled that a retailer who is competing against the two major supermarket chains cannot sell a whole range of products. It is through those restrictive zoning laws that our major supermarkets are shielded from competition. That is the true source of their market power. As I said, this was a wonderful opportunity for the ACCC to come in and fix the mess of the last decade. If we go back more than a decade, we had laws in this country that required the ACCC to provide special authorisation to allow the supermarkets to instigate schemes of shopper-docket discounts. At that time, the ACCC in its wisdom decided to give this authorisation, and since then we have seen thousands and thousands of small independent retailers have their market share stolen and that market share taken over by the large supermarkets.

Professor King, back in 2004, warned of the anticompetitive nature of shopper dockets. He wrote in a piece on 16 July 2004 about the Australian experience of shopper dockets. He wrote that the spread of shopper-docket schemes could lead to a reduction in competition in the grocery and petrol industries due to the exit of incumbent players and increased barriers to entry. And that, unfortunately, is what we have seen. Now, more than a decade on, the ACCC has finally come to an arrangement with the supermarkets that they will limit their shopper dockets to 10c. It is simply too late.

An honourable member: Four cents.

Mr CRAIG KELLY: I thank the member for his interjection. He is correct: four cents. It is simply too late. This is like closing the gate after the horse has bolted. No, it is not even closing the gate; it is leaving the gate open. Either a shopper docket discount scheme is anticompetitive or it is not anticompetitive. If it is not anticompetitive, how can the ACCC stand by and watch an agreement whereby two retailers, two competitors, in a market agree that they will limit their discounts to a certain amount? It beggars belief that the ACCC would allow such an arrangement. It has been configured as the worst of both worlds. This case provides the ACCC with ample opportunity to test our current law on predatory pricing, known as the Birdsville Amendment, in the courts. This would then enable the ACCC to come back to the parliament and say either that the law does not work and needs strengthening or that the law does work. We have had a law against predatory pricing in this country for six years, but the ACCC has not brought one single case. To date, we still do not know the effectiveness of that law, because it simply has not been tested by the ACCC in the courts.

There is also another issue with our competition laws. We know that, over the last several years, more than 1,000 small independent fuel retailers have closed down and gone out of business because of the shopper docket discount schemes. We often say how quickly small businesses close down and go out of business, but we have to think that behind each business there is a family, people with money invested, who have had their life savings wiped out because of these schemes. These small businesses should have rights and access to our courts, but they do not. Even though we do have these laws, which are untested and unproven, it is simply impossible for small businesses to proceed by themselves to test those laws; that is up to the ACCC.

Ultimately, we in this parliament have to decide whose side we are on. I know that there are some in this parliament who are quite happy to see two players control 70, 80 or 90 per cent or more of this industry sector. I say that is bad for our nation and bad for consumers.

It has been great to hear the wonderful first speeches of new members to this parliament. Many of them have said that they stand for small business. Under this government, a review of our competition and consumer laws is coming up. It is time that we backed up our rhetoric with action and made sure that our small business community is given the opportunity to compete. They do not want special privileges. They do not want handouts. They just want to be able to compete on a level playing field. I am confident that, if our small business sector are given that opportunity, if they are free from the anticompetitive effects of price discrimination and if they are free to compete where their competitors do not leverage profits through a shopper docket scheme, they will thrive like they have in the past.