Predatory supermarkets force smaller operators out – legal protection needed

Master Grocers Australia/Liquor Retailers Australia CEO Jos de Bruin has called for Section 46 of the Competition Act covering misuse of market power to have an effects test that deals with the predatory capacity of supermarket giants such as Coles, Woolworths and Aldi.

He said this is needed due to the chains opening new stores that run at a loss until competitors are put out of business.

Mr de Bruin’s comments follow the first consultation roundtable for the Competition Policy Review held last week hosted by Minister for Small Business Bruce Billson, which involved small business and retailer organisations.

‘There was broad support for the recommendation on the misuse of market power, however it was agreed careful drafting of the legislation and supporting guidance would be necessary to avoid confusion, minimise uncertainty or the overuse of legal action,’ Mr Billson said.

Mr de Bruin said that there was concern for the ‘calling in of projects’ by State Governments for big supermarket developments when they cannot get their way through Council approvals and rezoning, that results in smaller supermarket and convenience operators being forced out.

The MGA chief said that its recent consumer survey had shown that the public is critical of the role of Coles and Woolworths in crowding out other retailers.

He backed the push by ACCC chairman Rod Sims who wants the effects test added to Section 46 of the Competition Act.

‘However, S46 changes will not slow up Coles and Woolworths’ developments and they should have to have a pre-notification of acquisitions and buying up small retailers,’ he said.

‘I don’t believe it will be easy to get the changes to S46 through Parliament and it needs some form of access to the courts. Woolworths is the largest developer in Australia with a modus operandi to stop other competitors coming in.’

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