This article is part of a Chronicle. See more from this Chronicle
Sarah Moritz, Paul Schoff, Eric White, Jun 30, 2014
Competition in the Australian grocery retail industry has been a focus of Australian media, politics, and regulatory activity for several years. Given that the actions of Australia’s largest grocery retailers have a significant impact on small business, primary producers, and consumers, Coles and Woolworths have been subject to increasingly strident criticisms about their perceived dominance of the industry, allegations they “strong-arm’ suppliers,” and the flow on effects these actions have on smaller competitors and customers’ hip pockets at the checkout.
This article describes the dynamics of the industry in Australia, details the competition concerns, and outlines how the Government and the Australian Competition and Consumer Commission have responded to these concerns running just about every play from the antitrust enforcement playbook.
In summary, antitrust issues have revolved and-to some extent-continue to revolve around:
- market concentration and the cumulative competitive impact of a series of apparently individually benign acquisitions of existing supermarkets by Coles and Woolworths-so-called “creeping acquisitions,” leading to calls for legislative amendment;
- barriers to competitive entry in the form of restrictive provisions in supermarket shopping center leases entered by the major players-the ACCC has put an end to such provisions;