The Australian Competition and Consumer Commission (ACCC) has the market power of Coles and Woolworths in its sights, warning it will be watching for any “unconscionable conduct” when it comes to negotiating supply arrangements.
Chairman Rod Sims issued the warning during an address at the Melbourne Press Club, saying the market power of the two major supermarkets leaves many smaller suppliers feeling they have no real ability to negotiate supply arrangements.
“The ACCC can and will watch closely to ensure any such dealings do not involve unconscionable conduct by the supermarkets,” Sims said.
“To give another example, supermarkets sell both branded and their own private label products. This vertical integration in the supply chain needs close scrutiny to ensure the supermarkets do not misuse their market power under Sector 46.”
Sims pointed to a number of other sectors where bargaining power may be an issue, and outlined methods of dealing with imbalance.
“Telecommunications, particularly the National Broadband Network, and the operation of our major airports are sectors where ACCC oversight will be vigilant in the interests of both consumers and access seekers.”
Sims also used the opportunity to detail the ACCC’s plans to “see competition introduced into new areas,” which will see the watchdog become a “sometimes noisy proponent of this view.”
“Sound competition policy – when it is carefully thought out – provides benefits for consumers and for society overall.”