ACCC allows supermarkets to work together, set to ease competition rules in other sectors

The competition regulator will allow Woolworths, Coles, Aldi and Metcash to work together on sourcing, supply and food shipment.

Australia’s supermarkets have experienced unprecedented demand for groceries in recent weeks. Picture: Getty Images

The chairman of the Australian Competition & Consumer Commission Rod Sims said he was expected to authorise more competitors to co-ordinate their operations across a range of sectors, following Tuesday’s unprecedented deal for the supermarkets to work together, as essential parts of the economy link hands in the coronavirus pandemic.

“It was done for banking last week, supermarkets this morning, but we have a few others in there, I can’t tell you the names of the industries but there are a range of others that we are working with,’’ Mr Sims told The Australian.

“We are flat out both accommodating and shaping these requests so that people can do things without any fear of breaching our Act and yet we get the behaviour that we wanted in this time of crisis.

“It is all going very well, we are very pleased with it, we are very pleased that companies are working with us and of course they want to do that because they don't want to get taken to court so … I think you will find the announcements on this on a fairly regular basis going forward.’’

In a highly unusual move competition regulator will allow the nation’s biggest supermarkets — Woolworths, Coles, Aldi and wholesaler Metcash — to work with each other over the sourcing, supply and shipment of food.

The interim authorisation would allow supermarkets to co-ordinate with each other when working with manufacturers, suppliers, and transport and logistics providers.

The change means market practices that were once viewed as potentially illegal and which could have led to criminal sanctions can now be conducted in the open as the supermarkets are tasked with ensuring the supply of food and groceries in the wake of the coronavirus pandemic.

However, to prevent any collusion, the new competition ruling will not allow the supermarkets to agree on pricing.

The ACCC said on Tuesday that supermarket operators would be able to co-ordinate immediately to ensure consumers have reliable and fair access to groceries during the COVID-19 pandemic. I

t said the change was designed to ensure the supply and the fair and equitable distribution of fresh food, groceries, and other household items to consumers.

“Australia’s supermarkets have experienced unprecedented demand for groceries in recent weeks, both in store and online, which has led to shortages of some products and disruption to delivery services,” Mr Sims said.

“This is essentially due to unnecessary panic buying, and the logistics challenge this presents, rather than an underlying supply problem.”

“We recognise and appreciate that individual supermarket chains have already taken a number of important steps to mitigate the many issues caused by panic buying.

“We believe allowing these businesses to work together to discuss further solutions is appropriate and necessary at this time,” Mr Sims said.

Woolworths chief executive Brad Banducci welcomed the ACCC decision.

“We’re pleased that the ACCC and the government are supportive of sensible collaboration between Coles, Aldi, Metcash and Woolworths in this challenging period for the Australian community,” he said. “It’s in the national interest for retailers to be able to collaborate on issues such as the health and safety of team members and customers, and on ensuring Australia's supply chains are robust and operating effectively. This will ultimately mean more products, delivered safely to communities across Australia.”

The Department of Home Affairs has convened a Supermarket Taskforce, which meets regularly to resolve issues impacting supermarkets. Representatives from government departments, supermarkets, the grocery supply chain and the ACCC are on the taskforce. The interim authorisation applies to agreements made as a result of taskforce recommendations.