The Council of Small Business Australia (COSBOA) has launched a new campaign calling on the Federal Government to reform current competition laws to prevent the misuse of market power by major companies such as Coles and Woolworths.
The campaign ‘Let’s Compete: Change the Law’ launched this month with an online petition, and is rolling out to independent retail stores across the country with instore posters and signage.
Roz White, co-owner and operator of White’s IGA Group on the Sunshine Coast, told C&I Week the campaign was “critically important to the future health and prosperity of all small business right across the country”.
“It’s well beyond the IGAs and the independent supermarkets. This is about all small businesses and the future prosperity of the nation, propelling the economy and innovation and diversity… all those things that keep the economy healthy.”
In regards to competition from the majors, Ms White said that “it’s not so much the competition, we don’t mind being competitive and competing, but where there’s a distortion is what we need to look at and address.
“This is not about a whinge. This is just saying, let’s compete. We have a great offer to our consumers, they want us to thrive, they want us to be there, they want us. Our customers and our community want us to exist, we want to compete, we can compete, we’re happy to do that, but let’s look at the policy settings and make sure that they’re right. We feel [the current laws] are inadequate and they need to be looked at.”
Over the past six months the Australian Competition and Consumer Commission (ACCC) received almost 5000 complaints from small businesses. In its latest Small Business in Focus Report it was found that competition-related complaints, including misuse of market power, exclusive dealing and other competition issues, increased from 496 in 2014 to 639 in 2015 – an increase of almost 30 per cent. Of the 693 complaints, 262 were in relation to misuse of market power, up from 232 in 2014.
The new campaign coincides with Cabinet’s consideration of submissions received during the public consultation period which followed the March 2015 release of the Competition Policy Review Final Report.
COSBOA CEO Peter Strong implored small businesses and consumers across the country to get behind this campaign. With material to be sent to more than 8,000 retailers in the coming weeks, Mr Strong told C&I Week it’s a grassroots campaign.
“We need people to get out there, talk about it, network and go online to make their feelings known,” he said.
“Our window of opportunity to persuade the government is small but the stakes are high.”
Mr Strong noted that Cabinet has committed to an end of March decision on the matter, increasing the urgency to communicate the public and retailers opinions to the government.
Mr Strong is worried the government will “cave in to the big end of town” despite almost three quarters – 72 per cent – of Australians believing the grocery market is too dominated by Coles and Woolworths and that there is not healthy competition, while 75 per cent say competition laws should be strengthened.
“Small business wants to compete, but the law must be changed to stop the extraordinarily dominant businesses misusing their market power,” Mr Strong said.
“Any reform of competition law without an effects test and other changes will be a backward step for this country; reducing price competition, consumer choice and compromising the livelihoods of thousands of small business owners and staff.”
Consumers and affected retailers are urged to sign the petition to support stronger competition laws and call on the government to adopt an effects test.