David Littleproud’s supermarkets inquiry a political game

David Littleproud announces the ACCC inquiry at Parliament House in Canberra, with National leader and deputy PM Michael McCormack looking on. Picture: Gary Ramage

The competition watchdog’s inquiry into supermarket supply chains is a joke inspired by Agriculture Minister David Littleproud’s political ambitions, with no regard for either the integrity of the regulator or benefit for producers or consumers.

It is bordering on political influence of the independent regulator by directing it to conduct what can only be a superficial look at the issues.

Mr Littleproud, the deputy leader of the National Party, and Treasurer Josh Frydenberg on Wednesday announced the Australian Competition and Consumer Commission would examine “harmful imbalances” in bargaining power between farmers, processors and supermarkets relating to the supply of agricultural goods.

The inquiry will look at supply chains for meat, poultry, seafood and fruit and vegetables, and will also look at the effectiveness of the new dairy code of conduct.

One description used was that it would be a “high level” examination, which is Canberra code for superficial.

With answers due in November, the three-month inquiry - which comes amid growing internal pressure on Nationals leader Michael McCormack - will not allow enough time to delve into any issues that actually do exist.

Nationals leader and deputy PM Michael McCormack watches Agricultural Minister David Littleproud announce th ACCC inquiry. Picture: Getty Images

Actual existence of issues is the first problem.

For many of the sectors the supermarkets are a dominant buyer of their produce. The real answer is diversification of outlets through exports, and direct sales to consumers through farmers’ markets and online sales, among other means.

The big supermarkets have clear and dangerous market power. The bargaining imbalance with suppliers is clearly in their favour, but apart from stating the obvious just what will the ACCC uncover in three months?

They are also efficient vehicles to get produce to consumers, which is highly beneficial to suppliers.

Two years ago the ACCC handed the government its report on the dairy industry. It took 18 months to complete and resulted in an industry code.

This column rang around the farm sector this morning and was surprised to learn that Littleproud’s office had been contacting the farm lobbies in recent weeks to see if they had any issues.

In other words he was trying to drum up an excuse to have an inquiry.

Normally such investigations would come from the industry banging on his door, complaining to the ACCC and or direct to the media.

Little of the above seems to have happened in this case.

There is no doubt any look at how the supermarket treats its suppliers will uncover issues.

That is the nature of bargaining imbalance.

But in the midst of a global pandemic, fights with the world’s digital platform behemoths, dealing with regulated monopolies, trying to combat cartel activity and continued lies from suppliers to dupe consumers, one might think the ACCC had more than enough on its plate.

The supermarkets and suppliers are also battling COVID-19 to get produce to consumers, with little time to play Littleproud’s political games.

While minister Littleproud will be able to say he is doing something, the question is, for whom?