Big business warns against Greens Bill to break up supermarket giants grip on economy
Big business has warned of increased cost of living pressures if a new plan to break up the supermarket giants is successful.
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Business groups are calling on the government to reject the Greens’ plan to break up Aussie supermarket brands warning it could leave consumers struggling even more with the cost of living pressure.
Under a new Bill scheduled to be voted on in the Senate on Wednesday, Australia’s consumer watchdog would have the power to ask the courts to split up supermarket giants and crack down on duopolies.
The divestiture legislation would allow the Australian Consumer and Competition Commission to break up powerful corporations and if passed, the likes of Coles and Woolworths could be forced to divest assets that are “misusing their market power to inflate prices, exploit their supply chains, or keep out competition”.
But the Business Council of Australia said the Bill could potentially have serious unintended consequences that could result in consumers struggling even more than they do now.
BCA Chief Executive Bran Black said consumers could end up “paying more, rather than less” if the Bill passes the Senate on Wednesday.
Mr Black said the last three major competition reviews – the Harper Review (2015), Dawson Review (2003) and Hilmer Review (1993) – had all rejected divestiture powers.
“Experts looked at this policy most recently in 2015 and found it would negatively impact consumers, so this Greens Bill could cause prices to be more expensive,” Mr Black said.
“Multiple reviews have shown divestiture powers can put jobs at risk and up-end the stability of critical sectors, particularly in regional and rural areas, which have very complex supply chains.
“This proposed law doesn’t solve the issues currently being reviewed, including price transparency from farm gate to the shelf, and nor does it take pressure off inflation.
“We are acutely aware cost of living and price pressures are biting hard for Australians, however trying to rush through laws which have considerable unintended consequences, including harming consumers with increased prices, is not the answer.”
Under the Greens bill, the ACCC could apply to the courts for a divestiture order that could either force the sale of a suite of specific stores held by Coles or Woolworths, which would then have to be sold to a competitor or an international operator wanting to enter Australia; or increase competition within their supply chain.
Greens Senator Nick McKim said the new laws would give the ACCC the power to apply to the courts for divestiture when corporations are misusing their market power.
“The big supermarket corporations are ruthlessly using their market power to crush farmers, squeeze their workers, and price gouge shoppers,” Mr McKim wrote on X, formally known as Twitter.
“We are introducing laws that would create the power to break up the duopoly. Enough is enough.
“Too many people have been forced to skip meals, eat less healthy foods or go without other essentials just to afford to survive.
“Too many farmers have been sent to the wall.
“Divestiture laws exist in many other countries and it’s time Australia had them too.”
But Mr Black said the legislation captured all businesses and would allow the courts to break up a business if it is found to have a competition issue.
“These are extreme powers which do not help the cost-of-living crisis and it would mean courts and the ACCC decide which businesses and jobs need to go,” he said.
“The National Farmers Federation have told a recent Senate hearing they are opposed to divestiture and even the ACTU has rejected this idea.”
The Greens will seek support from all sides of politics for the Bill in the Senate.
The Nationals had previously flagged they could support the plan, with leader David Littleproud saying the laws would act as a powerful deterrent to force supermarket chains to do the right thing.
“I think we’ve gotten to a juncture now where protections need to be given to farmers and to consumers,” he told reporters last week.
“We want to work to make sure we get the architecture right and if we don’t get it right we miss out on the opportunity to get that protection.”
In 2015, the Senate Economics Legislation Committee recommended that divestment powers not be pursued after raising concerns that “court-ordered divestiture would risk significant disruption and economic damage, with unpredictable consequences for competition”.
That committee also found “evidence has not demonstrated that the potential advantages of such a power would outweigh the likely disadvantages”.
Originally published as Big business warns against Greens Bill to break up supermarket giants grip on economy
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