Liberals and Nationals in rift on supermarket break-up powers

Nationals MPs say they have little confidence new divestiture powers will be taken to the next election, and question whether the Liberals are serious about breaking up the big supermarkets.

Assistant Minister for Competition Andrew Leigh. Picture: NCA Newswire / Gaye Gerard

Doubts have emerged over whether the Liberals are serious about examining policy options to break up the big supermarkets, as Nationals MPs concede they had little confidence new divestiture powers would be taken to the next election.

Nationals leader David Littleproud said last week he had “struck an agreement with the Liberal Party about us designing and constructing what will go to the heart of making sure that there is proper safeguards around divestiture”.

Mr Littleproud has argued for the parliament to pass new “big stick” divestiture laws to break up the supermarket duopoly of Coles and Woolworths if they do “the wrong thing”.

in February he said Australia should have “scaling penalties right up to divestiture powers, where we can actually take away some of their stores within geographical areas, to give more competition and even remove some of the chains that they have, like Big W or BWS or Dan Murphy’s”.

The Australian confirmed talks did take place between the Liberals and Nationals on divestiture, but they were aimed at trying to prevent the rural party from supporting contentious Greens legislation that would give the courts and competition regulator the power to break up firms right across the economy.

Some Liberals, including economics standing committee deputy chair Garth Hamilton, have also backed broad divestiture powers. Mr Hamilton said he would “like to see us have some policy in this space”.

“I don’t think a Liberal government should ever be putting the concerns of monopolies or duopolies above the Australian people,” he said. “The economics committee has heard of a significant lack of competition … in the banking industry. You need both divestiture and a diversity of corporate models to address that.”

The Australian spoke to Nationals MPs who were sceptical that any serious commitment had been made by the Liberals to develop new divestiture powers, and some senior Liberals played down the idea an “agreement” had been struck.

Assistant Minister for Competition Andrew Leigh took aim at divestiture powers, telling ABC radio on Monday that previous competition reviews conducted by Fred Hilmer in 1993 and Ian Harper in 2015 had not recommended them.

“We’re sceptical,” Dr Leigh said. “But of course we’ll always look to advice from agencies and we’re looking eagerly to see what the ACCC comes back with in their supermarkets inquiry.

“We don’t see that (divestiture) at present as being a significant tool in the fight against market concentration, which, let’s be clear, is a significant fight for this government.

“We’ve seen a rise in market concentration, an increase in mark-ups over the course of the last couple of decades. That’s coincided with the lousiest decade of productivity growth in the post-war era, under the former government.”

Opposition Treasury spokesman Angus Taylor told The Australian that “during this cost-of-living crisis, it is critical companies do the right thing by their customers and their suppliers”.

Former Australian Competition & Consumer Commission chair Rod Sims said one of the most important reforms would be to bring in an unfair practices provision.