MGA survey finds unhealthy competition in grocery

A Master Grocers Australia/Liquor Retailers Australia national survey of attitudes to supermarket competition and market concentration in Australia found that a large majority of Australians – 72% – believe the grocery market is too dominated by Coles and Woolworths and that there is not healthy competition.

The survey comes as the Minister for Small Business Bruce Billson is about to release the wide-reaching Harper Review’s Report into Australia’s competition policy.

Industry groups such as the Australian Retailers Association, Council of Small Business Australia and MGA/LRA were looking to the Harper Report to resolve issues such as trading hours, competition policy impacts on SME costs, and changes to section 46 governing the misuse of market power with the introduction of an ‘effects’ test.

Other key findings of the MGA/LRA survey are:

  • Only 22% of respondents believe there is healthy competition
  • A large majority – 75% – say competition laws should be strengthened
  • 79% see it as “very” or “fairly” important for the ACCC to have the legal power and resources it needs to fulfil its charter, including halting anti-competitive practices. Many consider the ACCC to be “toothless” at the moment
  • 90% believe it is important for local independent supermarkets to survive.

MGA/LRA CEO, Jos de Bruin said: “Most of us know that the existing competition laws have permitted Coles and Woolworths to gain extreme market domination, up to 80% of the grocery market.

“The survey shows a great deal of support for strengthening the competition laws to create healthy competition. Specifically the survey shows a high level of support for introducing an ‘effects’ test, which would give the ACCC more power to stop Coles and Woolworths misusing their market power or engaging in anti-competitive behaviours which would have the effect of killing off competition.”

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