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Monday, 10 November 2008
Page: 10419


Ms LEY (8:10 PM) —I am delighted to support my colleague and neighbour the member for Mallee on this very important motion. I would like to quickly respond to comments made by the member for Hindmarsh that we as a coalition government did nothing during the time we were in power and to remind government colleagues that the coalition established a horticulture code of conduct. We kept pharmacies out of supermarkets, which was absolutely critical, and we had an ongoing program of support for the agricultural sector, which meant that small family farmers could supply produce to supermarkets. We are now in danger of seeing a lack of supply, so our support for the agricultural sector was a critical component of keeping competition, particularly for fresh fruit and vegetables in the farm sector. And we had the diesel fuel rebate—which, I might add, is under threat from the present government—which, effectively, kept the transport costs of grocery goods down.

Looking at our landscape, we do have the highest concentration of retail grocery in the OECD. Our two major grocery chains have a large share of the markets for petrol, liquor, hardware, merchandise and clothing. Anyone who says that this high concentration of ownership does not lead to high prices for consumers is kidding themselves. A supplier will charge what the market can bear, and that is what we are clearly seeing happen with our largest supermarket chains—an effective duopoly, Coles and Woolworths. I do not want to turn this into a Coles and Woolies bashing exercise. They are good companies, they often employ Australian kids and they provide a service. It is not a personal issue; it is about providing sufficient competition to keep prices as low as possible. It is also about supporting the independent grocery sector.

In the small towns of the Farrer electorate—and my colleague the member for Mallee has alluded to the Sunraysia district where we have small supermarket chains—the Fisher family supermarkets are, in many cases, the only choice available to people, unless they want to travel, with higher petrol costs, to larger centres. So it is not just about saying, ‘We’ve got Coles and Woolworths and now we have Aldi.’ These options are not always available. We have to ensure that those who live in small towns, although they obviously do not have the range of choice and probably not the level of price that you would find in Coles and Woolworths in the nearest regional centre, still have meaningful options, that they can still shop locally and still have a range of choice and be supplied with what they need. I would like to see the government implement measures to stop these creeping acquisitions. They are not caught by the Trade Practices Act and they are a prohibition on price discrimination.

I was delighted to see the ACCC recognise the drought in their report, because I very rarely see the ACCC acknowledging an understanding of the drought. They actually recognise that one of the factors of high food prices is the duration of the drought, lack of stored water, our adverse weather conditions and local supply disruptions due to quarantine restrictions. So a big bunch of roses for the ACCC for recognising the realities of farming in our difficult landscape at the moment.

I want to highlight the fragility of the supply chain for fresh food in this country and make the point that it is about more than the factors mentioned by the ACCC in its report. It is far more serious for suppliers than consumers, because for consumers it might just be a decision not to buy a certain product on a certain day because the price is a bit too high. But it can actually affect the viability of a farm business. I do not know how we can explain this to consumers, but I think they would be receptive to the message that we do not want to see price fixing, we do not want to see guaranteed returns for farmers, but we do want to see guaranteed supply of farm produce over time. What we are seeing is family farmers being wiped out, squeezed out, because basically they have no bargaining power against big supermarkets. My concern is that we are going to lose them completely and our options for supplying fresh food are going to narrow. Ultimately, that is going to be bad for consumers. More producers will go out of business, more food will be imported, more family farms will go under. Anyone who has dealt with growers will hear the stories about market power being exercised openly and also subtly as an implied threat: only selecting selective grower supplies, forcing some suppliers into secondary markets; and coercive demands, otherwise you are excommunicated, for example through the quality systems, the packaging, the delivery—not really relevant to what you are doing, but something that is beyond your control. (Time expired)