Australia's Grocery Sector

"Australia's two supermarket giants - Coles and Woolworths - control close to 80% of the grocery market and large chunks of the liquor and fuel sectors too."

There isn’t another country in the world where the supermarket industry is so concentrated.

This level of market concentration is ultimately bad for competition and for consumers.

Australia needs:

  • A mandatory industry code of conduct that covers the entire supply chain, from supermarkets through to processors and producers
  • Tough new laws to allow the competition watchdog, the ACCC, the power to apply to the courts to break-up companies where market power has been abused

In fact, the United Kingdom and United States already have such laws.

I have seen first-hand the impacts that supermarket concentration has on producers, processors and of course consumers.

More and more farmers are walking off the land, and we have seen major processors and manufacturers crumble due to a combination of poor labelling laws, a supermarket duopoly and a high Australian dollar.

Supermarket concentration isn’t good for employment either.

A PriceWaterhouseCoopers report on the state of the Australian grocery industry shows that despite controlling a staggering 80 per cent of the market share, Woolworths, Coles and Aldi only employ 43 per cent of all grocery employees.

In contrast, independent retailers with a 20 per cent market share employ 57 per cent of our nation’s grocery staff.

Strengthening our Competition and Consumer Act and forcing divestiture when market power has been abused would not be a silver bullet, but it would be a big step to ensuring the long-term viability of our primary producers, processors and retailers.

Ultimately, diversity of choice is good for all Australian consumers.

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