Supermarket consolidation at critical point, says ACCC boss

Scott Murdoch
The Australian
June 14, 2012

THE Australian Competition and Consumer Commission chairman Rod Sims has declared the regulator is reaching a “critical decision point” in its concerns over the rush of consolidation in the supermarket sector.

Mr Sims has told a Sydney business function today that major barriers still exist for potential rivals to Woolworths and Coles.

In the speech, Mr Sims said the major players currently dominated the groceries market and were building up similar stakes in liquor, homewares and petrol.

“The ACCC is already concerned about the market structures in the supermarket sector and the continued expansion of Coles and Woolworths relative to the other retailers,” he said.

“While it recognises that growth by the major supermarket chains has brought benefits to consumers as a result of their scale there’s a risk that with only two major national chains competition between them to offer lower prices and better service will be softer than it might otherwise be.”

Mr Sims said the ACCC would remain proactive in its monitoring of the retail sector.

“We can be seen to be at a critical decision point,” he said.

“Either we can ignore the current local acquisitions by Wesfarmers and Woolworths and in five years time see what market structure we have in key sectors.

“Or we can examine each local acquisition now as best we can and within our legislation to see if there’s a substantial lessening of competition,” he said.