ACCC flags new case against retail giants

John Durie
OCTOBER 01, 2014
THE AUSTRALIAN
ACCC chief Rod Sims has flagged a new unconscionable conduct case against either Coles or Woolies as part of the watchdog’s broadbased assault on the supermarket sector.
In his speech at the Food and Grocery Council today, Sims noted the recent Coles case and said “the proceedings arise from a broadening investigation which is continuing and we expect further action shortly”.
He declined to elaborate or say whether the new action would involve either Coles or Woolies or both.
In recent months the ACCC has launched a range of cases against the supermarket giants ranging from cartel cases in the washing powder sector, abuse of market power in petrol tokens, false advertising and unconscionable conduct.
It also runs a tight eye over any acquisitions the two make, but, as with the recent IGA additions to Coles in Western Australia, it approves the purchases as often as it knocks them back.
Small Business Minister Bruce Billson backed Sims’s concerns about the proposed industry code of conduct with major suppliers.
The concern is that given Coles and Woolies control over 75 per cent of dry grocery sales, they have market power over big suppliers.
As such, if Coles forced them to contract out of the industry code it could be leveraging this power.
The retailers reject the argument outright, noting the suppliers under the code can complain privately to the ACCC and any agreement will be subject to the code.
The retailers claim the right to contract out is simply to preserve commercial flexibility.
The debate is over who benefits from the flexibility and the suspicion in government and the ACCC is that the supermarkets, not the suppliers nor consumers, will benefit.