Xenophon to pursue big chains

RICHARD GLUYAS
September 12, 2013
The Australian

INDEPENDENT Nick Xenophon has expressed confidence that the market power of the giant retail chains can be reined in, despite an industry view that the new parliament could turn out to be less hostile than feared.

Senator Xenophon, who co-sponsored a bill in June with fellow independents Bob Katter and Andrew Wilkie to shrink the Coles and Woolworths businesses to less than 20 per cent of the market through asset sales, said he would work “constructively” with his new parliamentary colleagues.

“But I’m confident we can get results; this issue is not going to go away,” he said.

Mr Xenophon’s comments came as Metcash chief executive Ian Morrice called on the new Abbott government to level the retail playing field so all participants could compete fairly.

“With the self-service supermarket chains doing whatever they wish, dominating markets and heavily cross-subsidising their offers, they are thumbing their noses at the ACCC,” Mr Morrice told The Australian.

“Independent retailing is a very important part of Australian life, and I hope this government will be true to its word and stand up for the little guys.”

Mr Wilkie was more cautious, saying a meaningful curb on the market power of the chains would occur only with the support of a major party, and that was unlikely.

“But who knows? Maybe I’ll be pleasantly surprised,” he said.

Senator Xenophon said he had three priorities, including a mandatory code of conduct to govern commercial dealings between the chains and their suppliers, and the creation of a supermarkets ombudsman to resolve disputes.

He also said the Competition and Consumer Act should be amended to introduce compulsory divestiture powers, which would be enforced by the courts in “extreme” cases.

For their part, the retail giants were mainly concerned yesterday about the review of competition laws promised by Bruce Billson, the likely minister for small business and competition policy.

The review, which is expected to be led by three or four people and chaired by a senior business person, will be announced within 100 days and completed before the next election.

Mr Billson, a former small business owner, has said he is sympathetic to the view that the current misuse of market power provisions has been interpreted too narrowly by the courts.

He also has said that unconscionable conduct laws are impractical for small business owners.

While the big retailers were nervous about the formation of a hostile bloc of independents after the election, those fears are less pronounced, at least for one senior executive.

He said the Coalition could hold the balance of power in the Senate if it could garner the support of pro-market senators from the Liberal Democrats in NSW, Palmer United Party representatives, and a further senator from the likes of the Australian Motoring Enthusiast Party in Victoria, or the Australian Sports Party in Western Australia.

“The game has changed and potentially it’s now a more benign environment,” the source said.

Mr Wilkie said independents would be restricted to “agitating” for retail industry reforms, unless the major parties changed their pro-industry positions.