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Friday, 25 November 2011
Page: 9658


Senator XENOPHON (South Australia) (12:13): I am grateful for the comments made by my colleagues. In relation to those of Senator Milne: it is fair enough for her to say, by referring to the Bills Digest—the objective analysis of legislation, if you like, that we receive here—that it is about clarification and could be seen to be window dressing. I am disappointed that the Australian Greens cannot support the amendment at this time, but at least they are keeping the door open. I do acknowledge that there has been a change of guard at the ACCC, and that Mr Rod Sims, the new chairman, has taken a different approach. The statements he has made to date have been encouraging. The way in which he has approached evidence at Senate estimates hearings is refreshing. I welcome that, but I still think we are not giving the ACCC the powers it needs to deal with this adequately.

When it comes to issues of mergers and acquisitions, let us put this in perspective. Senator John Williams is in the chamber. I thought his contribution and a question he put to Mr Sims during a Senate estimates hearing not so long ago were telling. Senator Williams basically asked—I am sure he will correct me if I misquote him—how is it that in the last 30 years, the last generation, we have had a situation where Coles and Woolworths have gone from a 40 per cent market share between the two of them to something like an 80 per cent market share? That is an exponential increase. How is that good for competition? How is that good for suppliers down the supply chain? How is that good for wholesalers? How is it good for consumers that they have so little choice in this country? And how is it good that we have two big gorillas in the room when it comes to our grocery sector? You even have multinationals, such as Heinz, saying: 'This is killing us in terms of food processing. This is actually squeezing us out of the marketplace because of the conduct of those two.'

Our current laws are not good enough and that is why we need a change from 'substantially' to 'materially'. I am grateful to the Minister for Small Business for mentioning the Richmond amendment because I was going to get to it. The Richmond amendment is named after the location of the United service station at 128 Marion Road Richmond West in South Australia—a service station run for many years by William and Samira Fares. This is a small family business—a business where they put in hard work, do great mechanical work and serve petrol, and they are salt of the earth people. They have worked their guts out to build up that business, and what happens? Woolworths decides to set up an outlet right next door to them—blocking the view of oncoming traffic to their service station—to compete with them in a way that is not fair; to compete with them with their huge buying power in a way that cannot allow a level playing field.

It is an issue that I raised directly with Michael Luscombe, the former CEO of Woolworths, and he was good enough to meet with me in Sydney last year about this. I put to him—I do not think he would mind me saying this—'If you say that they can compete then why don't you let the Fares, in their United service station at 128 Marron Road Richmond West in South Australia, access petrol at the same price you can access petrol?' There are days when the wholesale price that William and Samira Fares pay for their petrol is higher than the price that Woolworths is retailing it for. How can that be fair? We need to remedy that. We need to give small businesses in this country are fighting chance.

I have small businesses—I am not going to do anything to identify them—come to my office, and they are even reluctant to be seen to walking into my office. They tell me, 'If we make a complaint to the ACCC about what Woolworths and Coles are doing to us, about the conditions they sometimes put on us, such as they suddenly want ten tonnes of a particular vegetable at a certain price'—which is below the cost of production for these businesses—'and we do not do it, then that will be the end of their relationship with us.' You also have small businesses setting up a business model that is based on having Coles and Woolworths as their main buyer, and they say, 'There's no point going to the ACCC because if we make a complaint we're finished.' If these things are happening then we need to do something about mergers in this country, we need to do something about increasing competition, and we need to do something about small businesses having a fighting chance.

That is why I have moved this amendment. I am grateful to the Greens for a least keeping the door open. Senator Madigan has told me privately, and he may want to make a contribution on behalf of the DLP, that he will be supporting this amendment. So we will be dividing on this amendment. I would urge Senator Williams, if he is able, to at least keep the door open to this and to at least consider supporting this.

We need to do something better. We need to have a situation where the laws of this nation work for the small business sector and, in turn, for consumers. As for the references that have been made to other countries not going to 'materially', in the United States—I am grateful for the work that Senator Williams has done on this—they have got the Robinson-Patman Act where you cannot have anyone having more than 20 per cent of the market. You do not have a situation there where two supermarket chains control 80 per cent of the dry grocery market as in this country. They have got legislative safeguards. They may not have the word 'materially' in some of those jurisdictions, but they have got other pieces of legislation that gives a semblance of protection to small business. That is what the key to this is.

I note that Senator Ryan, on behalf of the coalition, says that he is not supporting this. Senator Ryan and I have disagreements about the marketplace, but I have a genuinely good work relationship with Senator Ryan. I do respect that he has got some intellectual firepower. I do not agree with his position on the $1 milk and the like. I say that genuinely; at least we can have a discussion about it. My plea to Senator Ryan, to the coalition, to the Greens and to the government is: something has gone seriously wrong in this country when it comes to allowing the level of market concentration in so many industries. Associate Professor Frank Zumbo has assisted me with drafting the Richard amendment. He met the Fares; he spoke to them and he spoke to the Minister for Small Business, the Hon. Tom Koutsantonis, their local member. One good thing that has come out of the meeting that we had at Richmond West a year and a half ago is that there is now a Small Business Commissioner of South Australia, which Associate Professor Zumbo had a key role in creating.

There are some small changes to franchising law—I know that Senator Sherry is not ecstatic about that—where small business, under a Labor government, I might add, will have a fighting chance. It is disappointing that the Liberal Party in South Australia oppose that. Let us do this right. Let us revisit this. I welcome Senator Milne's comments. I would urge my colleagues to think carefully about this amendment. There will be a division on it based on Senator Madigan's gracious support for this amendment. There is something seriously wrong in this country in the way that we have dealt with the big end of town and small businesses.