Watchdog sets sights on Coles, Woolworths

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SHOPPERS will get more choice about where they buy groceries and how much they pay under new rules designed to end the market domination of Coles and Woolworths. In a move to protect smaller retailers and ensure greater competition, the Rudd Government has given its competition watchdog enhanced powers.

The Australian Competition and Consumer Commission will have the power to crack down on “creeping acquisitions” where major companies expand their market power by gobbling up smaller retailers.

The changes not only affect supermarket giants, but any big companies, such as childcare centres.

National Association of Retail Grocers of Australia chairman John Cummings said the changes were encouraging and should benefit consumers.

“Whether you are buying petrol or bread, if there is only one player you pay more,” Mr Cummings said.

CHOICE spokesman Christopher Zinn said: “The average consumer might think creeping acquisitions is some type of horror film … but what makes it important is that when you have plenty of people fighting for their business, that is when those people have to work harder for their business.

“Prices have to be cheaper, the service has to be better, the choices have to be wider.”

Mr Zinn said Woolworths couldn’t be blamed “for wanting to expand voraciously, that’s in their DNA”. But creeping acquisitions was one area where the brakes needed to be applied on the free market.

A 2009 CHOICE survey found that where shoppers lived and the intensity of retail competition in their area had a major impact on what they paid at the local supermarket.

It also found there was no difference in the average price of a basket of groceries at Coles and Woolworths.

But Competition and Consumer Law Expert, Associate Professor Frank Zumbo, said the changes were “just window dressing” and would not stop the growing threat to competition and consumers.

Competition Policy Minister Craig Emerson said the ACCC would have the power to reject acquisitions that substantially lessened competition in any market.