Australian Competition and Consumer Commission Chairman Rod Sims has given the regulator's perspective on the debate surrounding the market share held by the two major supermarket chains. Mr Sims was speaking at the Australian Food and Grocery Council's industry forum in Canberra.
"At the ACCC, we are completely clear that our role is only to protect the competitive process, and this is how we see the current debate," Mr Sims said.
"It is simply incorrect to label all those who question aspects of the degree of market power of the major supermarket chains as people wanting to protect inefficient businesses."
"Second, we see the supermarket issues capable of being dealt with under the Competition and Consumer Act, and we do not see use of the Act as excessive regulation."
"Indeed, effective implementation of the Act is vital for the success of our market economy. It provides clear and wide boundaries within which we can all benefit from the power of the profit motive," Mr Sims said.
"It is incorrect to argue that a market economy needs no regulation. It requires a modest amount of appropriate regulation to be effective, and this is what the Act provides."
In outlining supermarket issues that fit under the Act, the chairman provided an update and perspectives on supplier issues, the proposed code of conduct, shopper dockets, credence claims, mergers and safety issues.
Mr Sims also explained the ACCC's enforcement role and how it must always act on the basis of facts and evidence in taking court action.
"Our enforcement role, therefore, is not to be a decision maker. This is for the courts which are, of course, the ultimate umpire, as they should be."
"Take our shopper docket investigation as an example where the ACCC's role as an enforcement agency has been sometimes misunderstood."
Mr Sims said the ACCC has no power to ban shopper dockets, nor do we want the power to ban promotions.
"As an enforcement body, the ACCC can investigate market activity and, where appropriate, take court action seeking injunctions to stop conduct and seek penalties in appropriate cases."
Mr Sims also welcomed the 'root and branch' review of Australia's competition laws as an important opportunity to ensure the laws are appropriate and serve to enhance the welfare of Australians.
The speech is available on the ACCC website.
TWU to Small Business Minister: major retailers' squeeze on suppliers extends well beyond food industry
The Transport Workers' Union (TWU) has told Small Business Minister Bruce Billson that the relentless squeezing of suppliers by major retailers like Coles extends well beyond the food industry, and that when it comes to squeezing Australian truck drivers, it can lead to death and destruction on the roads.
TWU national secretary Tony Sheldon said:? "I welcome the comments from Minister Billson reported in the media that major retailers like Coles are engaged in 'harsh bargaining' towards food suppliers.
"As with the food and farming industries, the economic power of Coles and other major retailers allows them to dictate to truck drivers and the road transport industry to do more for less."
Coles transport manager Craig Wickham admitted in cross examination at the Road Safety Remuneration Tribunal that company KPI require him to reduce transport costs and that "this year we [Coles] will reduce transport costs by 5%".
Mr Sheldon continued: "These 'harsh bargaining' practices in the food industry threaten jobs and businesses – but in the road transport industry they threaten lives.
"This was graphically highlighted on Sydney's northern beaches, when a Cootes transport petrol tanker crash resulted in a number of tragic deaths.
"Cootes, which carries fuel in the Coles supply chain, was subsequently found to have dozens of unsafe trucks on the roads. It seems that the pressure to keep low price contracts no matter what, meant that maintenance was squeezed."
More than 20 years of evidence from cross-party inquires, coroners' reports and academics has established the link between rates of pay for truck drivers and safety on our roads.
Testimony given by Professor Michael Rawling from the University of Technology Sydney, to the Federal Government's Road Safety Remuneration Tribunal this week zeroed in on the dominant role of major retailers in the transport supply chain.
"Major retail clients can exercise influence over the maximum price paid and the maximum travel time available for truck journeys to deliver client freight…? drivers frequently must accept work terms and conditions put to them, or fail to receive the work. It is these drivers who end up bearing any of the subsequent adverse consequences."
Mr Sheldon concluded: "If Minister Billson and the government are serious about standing up for small businesses, and about road safety, then it is critical they continue to support this tribunal and demand Coles and the rest stop squeezing the life out of suppliers.
"Evidence like this from Professor Rawling, together with the countless statements from truckies and the litany of fatal truck crashes on our roads should be all the proof this government needs."
