Move to smash Coles and Woolworths duopoly

Ken McGregor
The Advertiser
March 27, 2012

SUPERMARKET giants Coles and Woolworths would have their market share cut from 70 to 20 per cent under legislation to be put before Federal Parliament.

Under legislation to be proposed by independent Senator Nick Xenophon next month, the Australian Competition and Consumer Commission would be given the power to apply to the courts to have the chains’ duopoly broken up.

The draft legislation would call for a break-up over five years, with the courts deciding the most effective way to do this.

“Their market power is immense, it is unprecedented anywhere else in the world that 70 per cent of the grocery market is controlled by just two chains,” Senator Xenophon said.

“They’re like two big gorillas in the room.”

It is estimated Coles and Woolworths control about 70 per cent of the packaged grocery sales and 50 per cent of fresh produce sales, such as meat, fruit and vegetables. “It’s time that this was on the national agenda, we can’t wait any longer for action,” he said.

The ACCC has begun investigating alleged “unconscionable conduct” by Coles and Woolworths amid claims they have been squeezing suppliers in a bid to cut prices.

Senator Xenophon will introduce the draft legislation next month with a view to introducing it at the next Parliament sitting in May.