Albanese Government Rejects Proposal to Break up Supermarkets: Treasurer Raises Concerns

The Albanese government has expressed its lack of interest in adopting powers to break up major supermarket companies. Treasurer Jim Chalmers has highlighted several issues with this approach, questioning whether supermarkets that are made to sell would be allowed to sell to another big rival. He also raised concerns about the potential closure of more stores in local communities and the potential decrease in competition. Chalmers emphasized the steps that the Albanese government has already taken to address competition issues, including funding consumer advocacy website Choice for more price transparency and toughening the Food and Grocery Code.

The Coalition, on the other hand, has revealed its support for a Greens proposal to legislate government powers to “divest” supermarkets of their assets and stores. Coalition leader Peter Dutton referred to this plan as a “last resort” to tackle price gouging and competition issues. He pointed out that there is currently a massive concentration of market share within the two major supermarket companies, Coles and Woolworths. Nationals leader David Littleproud added that the three biggest supermarkets in Australia (Woolworths, Coles, and Aldi) make up about 74 percent of the market share, whereas in the UK and US, their big three control only about 30 to 40 percent of the market.

It is important to note that while Australia, the UK, and the US share common histories, their consumer markets differ significantly in terms of population and geographic size. The Coalition’s plan involves empowering the Australian Competition and Consumer Commission (ACCC) to issue fines of up to $2 million, significantly higher than the current fine of $187,800. Additionally, a Supermarket Commissioner role will be established to hear complaints from farmers and suppliers and mediate between the parties.

Shadow Treasurer Angus Taylor emphasized the importance of finding a balance in this initiative and ensuring that appropriate safeguards are in place. He distinguished this plan from other proposals by highlighting that it focuses on constructive ways to promote competition. In February, Prime Minister Anthony Albanese compared calls to break up major supermarkets to the Soviet Union forcing businesses to sell assets to the state, emphasizing that Australia has a private sector economy and not a command and control economy. He stated that the focus should be on implementing proper competition measures, which is being explored by the ACCC.

Overall, the debate around breaking up major supermarket companies in Australia involves complex considerations. While there are concerns about market concentration and unfair practices, there is also a need to maintain a balance and ensure that competition is promoted in a way that benefits consumers, farmers, and suppliers. The government’s focus on transparency, strengthening regulations, and providing avenues for complaints and mediation demonstrates its commitment to addressing these issues within the framework of a private sector economy.