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Small business meeds real protection from big companies destroying them.

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MEDIA RELEASE SF/140 Tuesday May 22, 2007


The Government must give small businesses genuine protection from big companies pricing them out of the market, when it amends the Trade Practices Act.

Predatory pricing refers to big businesses like supermarket chains dropping their grocery prices in one area, to destroy smaller competitors, then raising prices later on. The law should prevent this, but it doesn’t.

If big businesses want to drop their prices, they should drop them in all their outlets, as happens in Canada.

FAMILY FIRST is passionate about protecting small businesses because they are vital for competition, which ensures the lowest prices for families.

A massive 80 per cent of the grocery market is controlled by Coles and Woolworths. Small businesses know they can never win a price war and the danger is that more and more small businesses will be forced out. Families are the ones who really suffer as grocery prices climb even higher. Last year food inflation was almost 10 per cent!

One of the key reasons that food prices are soaring is because the market is not working. There is not enough competition to keep prices low.

There are also too many hurdles to prove predatory pricing. It should not be necessary to prove the accused company has a substantial degree of market power. High Court Justice Michael McHugh acknowledged this was a real problem. The key factor should be whether a company is trying to destroy another by unreasonably low pricing.

The Government has a chance to fix this mess. It is time to stand up to big business and give real protection to small businesses and families.

Media enquiries phone Chief of Staff Felicity Dargan on 0409 550 446