‘Cooperation’ needed to crackdown on supermarket land banking

A major crackdown on supermarket practices is underway, but a key element could be easier said than done.

Federal Treasurer Jim Chalmers has acknowledged a key part of the government’s supermarket crackdown is hitched on co-operation with states, territories and local councils.

In addition to injecting $30m into Australia’s consumer right watchdog, the Albanese government has pledged to look at planning and zoning reforms in a bid to counter land banking and support supermarket competition.

But the federal government is jurisdictionally restricted because planning and zoning are typically handled by state, territory and local governments.

“I think it’s right to recognise that a lot of the planning and zoning powers are held by other levels of government,” Mr Chalmers told reporters on Tuesday.

“That’s why national leadership is so important. We want to get a good outcome here for the Australian people.

“There are concerns about land banking and other issues, and we don’t want to see competitors to the big two supermarkets are necessarily locked out, because more competition is good for consumers.”

Federal Treasurer Jim Chalmers says there is ‘an obvious case’ for all levels of government to work together to combat supermarkets land banking. Picture: NewsWire / Martin Ollman

He said the Treasury had spoken to state and territory counterparts earlier in the year about measures to boost competition, but that now the federal government wanted to speed things up.

“We think there’s an obvious case for commonwealth, state, territory and local government cooperation, because the powers in many instances, are held by other levels of government,” Mr Chalmers said.

“We all recognise the need. There is a willingness and an enthusiasm to engage in all levels of government, because together, by working together, we can get a better deal for the people we represent.”

The Australian Competition and Consumer Commission (ACCC) said last week it would investigate claims supermarkets were buying up property with no immediate development plans.

Metcash, which owns IGA and Foodland, told a senate probe earlier this year the big supermarkets were blocking out competitors by buying up sites without developing them.

Both Woolworths and Coles took a different view, telling the same inquiry they were strategic purchases for longer-term planning.

A senate inquiry found Woolworths and Coles were engaging in property purchasing practices that could be considered land banking. Picture: NewsWire / Roy VanDerVegt

But the inquiry said the companies were describing land banking practices.

The government’s crackdown comes after the ACCC announced last week it was suing Woolworths and Coles for allegedly misleading customers on discounts.

The regulator alleged both major supermarkets pushed prices up by at least 15 per cent before slapping them with promotional discount stickers often at prices higher than before the hike.

The ACCC said Woolworths did this for 266 products in its Prices Dropped promotion over a period of 20 months, while Coles did it for 245 products in its Down Down promotion across 15 months.

The new federal funding is aimed at bolstering the ACCC’s ability to proactively search for misconduct and investigate supermarkets’ reasonings for pushing up prices.