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Labor backs big supermarkets, ACCC says market divestment a government issue

Labor’s shadow treasurer Chris Bowen said last week that while Labor welcomes the Harper Review’s over-riding philosophy that competition policy should be focused on making markets work in the interests of consumers, he doesn’t support an effects test.

And ACCC chief Rod Sims told a conference in Canberra about his concerns over loopholes in the grocery code of conduct that would leave suppliers exposed to paying for products classified as unfit for sale or waste that may not be the suppliers fault.

Mr Sims has ruled out forcing Woolworths to divest its market power, which he said was a policy issue for governments, when commenting on liquor industry issues.

The Harper Review report on Australia’s competition policy recommended changes to Section 46 governing the misuse of market power that would restrict the ability of major companies such as Coles and Woolworths to force out smaller competitors if their business decisions had the ‘effect’ of substantially lessening competition.

However, Mr Bowen tried to draw parallels with stopping companies trying grow scale to export to Asia.

Labor’s answer is the grocery industry code of conduct. “Once formalised, and I know further Treasury consultations are underway, the code will hopefully help reduce inappropriate use of market power across the value chain,” Mr Bowen said.

CEO of Master Grocers Australia/Liquor Retailers Australia, Jos de Bruin, commenting on the Harper Review report, said that all the chains are concerned about is crowding out existing businesses, lessening competition, furthering their market dominance and power and securing their own obscene profits.

Agriculture Minister Barnaby Joyce launched his agriculture competitiveness paper and aims to state a case for stricter competition policy, focusing on Section 46 of the Competition Act.

Warren Beaumont

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