Coalition promises to crack down on supermarkets

A CRACKDOWN on supermarket bargaining powers will likely form part of the Coalition’s root and branch review of competition laws.

Addressing food industry leaders in Canberra, Mr Billson said the review would consider concerns surrounding the impacts of market control by the retail giants.

A CRACKDOWN on supermarket bargaining powers will likely form part of the Coalition's root and branch review of competition laws, Small Business Minister Bruce Billson intimated on Wednesday.

Addressing food industry leaders in Canberra, Mr Billson said the review would consider concerns surrounding the impacts of market control by the retail giants.

He said while some of the issues that have worried food producers and processors may not be technical breaches of current laws, the review would aim to update the laws to reflect current practices.

"While intensified competition between the two major chains has reduced grocery retail prices, there are concerns that those reductions come at the expense of suppliers and impact on the longer term durable benefit to consumers," he said.

"We have to ask ourselves: will these price and market pressures impact on the viability of the food and grocery industry over the long term, and will they stifle innovation and investment by suppliers.

"And will this result on higher grocery prices in the longer term?"

The head of the Australian Consumer and Competition Commission, Rod Sims, also address the meeting, welcoming the review and updating the Commission's investigations of supermarkets.

He said the investigation has already unearthed evidence of allegations of conduct the Commission considered may break the law and "did not conform with acceptable business practice".

"I was very clear in identifying that the conduct in question was not necessarily identical across suppliers, product lines or even supermarkets," he said.

"Since my statement, intense investigation has continued with extensive evidence being obtained including through use of our statutory information gathering powers."

Mr Billson said the review would be underway before the end of the year, with terms of reference expected to be released in the near future.