Andrew Reitzer slams ACCC for failing to curb supermarket giants

Blair Speedy
February 28, 2013
The Australian

OUTGOING Metcash chief executive Andrew Reitzer has slammed the competition regulator for failing to curb the market power of supermarket giants Woolworths and Coles for more than a decade.

Speaking after the appointment of his successor, former Warehouse boss Ian Morrice, Mr Reitzer said the Australian Competition & Consumer Commission had been largely ineffective in regulating the grocery market since he became Metcash chief executive in 1998.

“For the 15 years I’ve been doing this job, the ACCC has done nothing to correct the imbalance of market power in this industry,” Mr Reitzer said.

“We’ve gone through a period where the spotlight has been on our industry with various inquiries and investigations, and during the periods when the spotlight is on, the behaviour within the industry has been a lot more kosher, but then the spotlight goes off and they get up to all their usual tricks and uncompetitive behaviour.”

His comments follow ACCC chairman Rod Sims’s testimony to the Senate earlier this month, in which he backed the formation of a legally enforceable code of conduct governing Coles and Woolworths, and flagged concerns about the impact of supermarket-issued discount vouchers on the petrol market.

Meanwhile, the ACCC is investigating claims of misuse of market power and unconscionable conduct by the major supermarkets, and Mr Sims has pledged to examine every one of the latter’s land and store acquisitions after Woolies refused to submit to a voluntary regime under which they would submit every purchase for approval.

Mr Reitzer said Metcash was “not holding our breath” for an outcome that would lead to real change in the industry.

“But we have a new chairman of the ACCC, so we’re waiting to see what the outcome is,” he said.

Woolworths and Coles both regularly claim to be increasing their share of the grocery market, which implies that the independents serviced by Metcash are going backwards, but Mr Reitzer rejected suggestions the company’s market share was in decline.

“For the last four months, our market share has gone up, so I don’t understand those statements — people make some wild accusations,” he said.

Mr Morrice, named yesterday as Mr Reitzer’s successor effective from June 30, said the regulatory focus on the majors could aid the independent operators supplied by Metcash, which include the IGA and Foodworks grocery banners, independent bottle shops including the Duncan’s and Bottle Mart chains, and independent hardware stores trading as Mitre 10.

“We’re not expecting life to get easier, but it will make everyone more circumspect about what their property and growth plans are, so in that respect I think that type of focus is positive for the consumer and for us representing the independent retailer,” he said.

Mr Morrice, who has been a director of Metcash since June last year, has more than 30 years of retail experience. His most recent position was head of New Zealand discounter The Warehouse.