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Monday, 10 November 2008
Page: 10420

Ms OWENS (8:16 PM) —I rise to speak in support of the motion, although I would like to comment that it does include one of my pet dislikes—that is, statements in particular that call on an action imply that there has been no action, so in calling on the government to address the issue, there is the implication that there has not been any action. Of course there has, and I will cover some of that later in this speech.

It seems a general view that there is extreme concentration in the grocery industry. It is perhaps not as bad as the independents make out. They tend to use the figures for packaged groceries, which are of course quite high—over 70 per cent. In the areas of fruit and vegetable, fresh meat, bakery, dairy products, deli products and eggs the figure is closer to 50 per cent—still a substantial market share when you are talking about two major supermarket chains, Coles and Woolworths. In Australia we are also not as bad as some international comparisons—for example, New Zealand and Canada—yet we in government do believe that there is the need for real reform in the grocery sector. That is why, upon our election, we acted almost immediately. One of the first acts of the Rudd government was to commission an ACCC inquiry into the competitiveness of retail prices for standard groceries. The ACCC reported back to government, stating that Australian consumers would benefit significantly if Coles and Woolworths faced more competitive threats that encouraged more aggressive pricing strategies.

The ACCC made a number of recommendations that would improve competition. The ACCC report showed that prices are lower when there is a major competitor or Aldi within one kilometre and recommended changes to zoning and planning laws to have specific regard for the likely impact on competition for new retail development applications. In implementing that recommendation, the government has referred the anticompetitive impacts of state and local zoning and planning laws to COAG, and this is very much about getting more competition in more communities to put downward pressure on local food prices.

The ACCC also expressed concern about creeping acquisition. Creeping acquisition has been seen as an issue for several years. In fact the 1999 report of the Parliamentary Joint Select Committee on the Retailing Sector, the Baird committee, made reference to it, as did the Dawson review in 2003, and the Senate Economics reference committee in 2004 noted that, ‘as a matter of logic’, creeping acquisitions in concentrated markets must, over time, substantially lessen competition. So the need to act in this area has been well known since at least 1999. The Rudd government issued a discussion paper calling for public comment on the best way forward for creeping acquisitions law on 1 September this year, and several models are being investigated and legislation will follow soon. On 23 April this year, the government announced changes to foreign investment rules to make it easier for the likes of Aldi to set up more shops and create more competition in the market.

We have also acted in the area of trade practices reform. During the last session of parliament the government introduced the biggest package of reforms to the Trade Practices Act in 22 years, including provisions to strengthen predatory pricing laws that will ensure that powerful companies—including the major supermarket chains—do not have the ability to persistently sell below cost and run small competitors out of the market. The ACCC also recommended that a mandatory nationally consistent unit-pricing regime be introduced for standard grocery items both in store and in advertising and the government have indicated we will be rolling out a mandatory consistent unit-pricing scheme, helping consumers determine value for money when it comes to different sized packages. It should be noted that Aldi has been using a unit-pricing scheme since November 2007, and the European Union introduced its legislation in 2002.

The member for Mallee is right to be concerned about a lack of competition in the grocery sector. Consumers are losers when concentration of ownership is high; prices are lower when there is competition in the market. Growers and suppliers are losers when concentration of ownership is high and there are few buyers for their products. But communities also are losers when we lose the small shopping centres that provide outlets for community interaction. We lose something much greater than just a place to buy our milk. We are right to be concerned and we are right to continue to act. The government have been acting all year on this, and we will continue to do so.