ACCC chairman calls for retail rules revamp

Blair Speedy
August 02, 2012
The Australian

THE competition watchdog is working with supermarket giants Coles and Woolworths on a streamlined approval process that could make it easier for them to buy independent supermarkets and liquor stores.

Speaking at the NAB National Small Business Summit in Melbourne yesterday, Australian Competition & Consumer Commission chairman Rod Sims said he was hoping the supermarkets would agree to a system that would require them to give more information upfront rather than respond to the commission’s inquiries.

“We’re also looking at mergers and acquisitions that have been undertaken by the supermarkets — if you look at our mergers register you’ll notice several small acquisitions that involve the liquor, grocery and home improvement sectors,” he said.

The ACCC in June said it would oppose a deal under which Woolworths’ majority-owned pubs business, ALH, would buy 31 hotels — six months after the acquisition was first announced.

“Because there’s a lot of them, we’re trying to streamline the processes for looking at them, and that can only happen because we have a voluntary merger notification system if we get co-operation from Woolworths and Wesfarmers, and we’re currently seeking that,” Mr Sims said.

In his first public comments on the ACCC’s probe into supermarkets’ fuel discount schemes since The Australian broke the news of the investigation last month, Mr Sims said they may give shoppers cheaper fuel in the short term, but the ACCC was worried about their long-term impact.

“We’re currently assessing whether competition issues arise from the frequency, duration and size of the discounts offered by Coles-Shell and Woolworths-Caltex,” he said.

“Obviously, we understand that consumers get a discount, but we’re concerned that the extent of those discounts and the frequency of them can affect . . . long-term competition in the petrol sector and indeed in the supermarket sector.”

The ACCC is understood to be focusing on periodic discounts in excess of the standard 4c per litre, which are generally awarded to shoppers who spend a minimum of $30 in Coles or Woolworths supermarkets.

Mr Sims said the ACCC was also examining whether there had been unconscionable conduct banned under the Trade Practices Act between supermarkets and suppliers over the retailers’ selling of in-house brands, as well as misuse of market power. “In situations where you’ve got a supermarket that is selling both private label products and competing businesses, that vertical relationship is always a concern for misuse of market power,” Mr Sims said.

“The claims that have been put are in relation to things that vary from availability of shelf space . . . through to people being required to provide ideas and then lo and behold those ideas get used by the competitors.”

Speaking earlier at the same conference, Australian tax office commissioner Michael D’Ascenzo urged businesses experiencing problems paying their tax to approach the office for assistance.

“We’ve set up 250,000 payment arrangements