Push to break up chains slammed

Business groups are calling on the government to reject the Greens’ plan to break up Aussie supermarket brands warning it could leave consumers struggling even more with cost of living.

Under a new Bill scheduled to be voted on in the Senate on Wednesday, Australia’s consumer watchdog would have the power to ask the courts to split up supermarket giants and crack down on duopolies.

The divestiture legislation would allow the Australian Consumer and Competition Commission to break up powerful corporations and if passed, the likes of Coles and Woolworths could be forced to divest assets that are “misusing their market power to inflate prices, exploit their supply chains, or keep out competition”.

But the Business Council of Australia said the Bill could have serious unintended consequences that could result in consumers struggling even more than they do now.

BCA chief executive Bran Black said consumers could end up “paying more, rather than less” if the Bill passed the Senate on Wednesday.

Mr Black said the last three major competition reviews – the Harper Review (2015), Dawson Review (2003) and Hilmer Review (1993) – had all rejected divestiture powers.

“Multiple reviews have shown divestiture powers can put jobs at risk and up-end the stability of critical sectors, particularly in regional and rural areas, which have very complex supply chains.

“This proposed law doesn’t solve the issues currently being reviewed, including price transparency from farm gate to the shelf, and nor does it take pressure off inflation.

Under the Greens bill, the ACCC could apply to the courts for a divestiture order that could either force the sale of a suite of specific stores held by Coles or Woolworths, which would then have to be sold to a competitor or an international operator wanting to enter Australia; or increase competition within their supply chain.