Labor warned against overreach on supermarket policy

A leading business group has warned of unintended consequences from making a supermarket code of conduct mandatory, as the Coalition pushes for broader powers.

The interim supermarket review has attracted criticism from business and the Coalition.

A leading business group has warned of unintended consequences from making a supermarket code of conduct mandatory, as the Coalition pushes for broader ­powers including the potential to force food and grocery giants to sell assets if they act in bad faith.

Following the release of former Labor minister Craig Emerson’s interim supermarket review, which recommended fines up to 10 per cent of turnover, Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the government needed to “be cautious when ­introducing significant regulatory requirements that could set significant precedents”.

Farmers were split on the proposals, with the Queensland Strawberry Growers Association warning the mandatory code would be “toothless” as growers were fearful of taking on major stores, while the National Farmers Federation backed the recommendations.

Jim Chalmers on Monday seized on divisions within the ­Coalition over divestiture powers, accusing the opposition of having a “different view on competition policy between 6.46am … (and) 6.47am” and that the opposition was “all over the shop when it comes to competition policy and supermarkets”.

The attacks came as splits deepened within the Coalition over ­divestiture powers, with opposition home affairs spokesman James Paterson calling for them to be implemented while finance spokeswoman Jane Hume raised concerns saying they may not lead to a reduction in grocery bills.

“There’s always concern with divestiture powers whether they will actually decrease prices,” Senator Hume said.

Peter Dutton denied splits within his party, saying the opposition had been “very clear and consistent” on supermarket policy as he attacked Dr Emerson’s ­inquiry as a “Mickey Mouse review conducted by a Labor mate”.

The Australian last week revealed Nationals MPs had little confidence the Coalition would take divestiture powers designed to break-up big supermarkets to the 2025 election.

Coalition sources on Monday confirmed Mr Dutton and opposition Treasury spokesman Angus Taylor were leading the development of a competition policy with Nationals leader David Littleproud focused on putting guardrails in place and applying greater economic reality to “big stick” measures.

The policy would mirror powers developed by the Turnbull and Morrison governments threatening to divest energy companies that break the rules.

Mr Dutton and senior Liberals were concerned about the ­Coalition appearing to support or follow the Greens, who put ­forward a bill allowing for the break-up of supermarkets and ­corporations that abuse market power.

Mr Littleproud began winding back his rhetoric on breaking-up supermarket chains last week after it emerged Mr Taylor was taking the lead on the Coalition’s policy.

Anthony Albanese on Monday said the supermarket review would bring down prices and help “Australians get the best deal possible”.

After business chiefs launched a fightback against the government’s “anti-business” policies, Dr Chalmers denied Labor was demonising profits but did not say whether it was sustainable for supermarkets to be making less than 3c in every dollar. Mr McKellar said Australian supermarkets needed to offer the lowest possible prices but warned “heavy-handed regulation could have unintended consequences”.

“ACCI understands the rationale behind making the code mandatory, but the government needs to be cautious when introducing significant regulatory ­requirements that could set ­significant precedents,” he said. “There needs to be further consideration of the likelihood that measures introduced for one sector will create an expectation of equivalent regulatory extensions to other areas of the economy where there is deemed to be a significant concentration of activity among large firms.”

With the government likely to need to secure Senate support for changes in regulation, the Greens attacked Dr Emerson’s recommendations, saying proposed fines did not go far enough and that Labor was “lining up with the giant supermarket corporations and putting billions of dollars of annual profits ahead of the millions of Australians who can’t afford to put food on the table”.