ACCC prepared to flex muscle over supermarket powers

Posted by AFN Staff Writers on 21st October 2011

Australian Competition and Consumer Commission (ACCC) Chairman, Rod Sims, told the Federal Senate Economics Legislation Committee this week that the ACCC’s ability to control the misuse of market power by Australia’s leading supermarkets is something that it “really needs to test”.

Mr Sims was being questioned by Federal Senators about how much power the consumer watchdog has. He said, “We need to see how it goes. If we form the view that we need more power, then we will be politely saying so.”

The Federal Senate discussion followed an announcement from the ACCC earlier this month that the ACCC is watching closely the way Australia’s leading supermarkets, Coles and Woolworths, wield their purchasing power.

Monitoring the ‘milk price wars’

During the discussion, the National Party of Australia Senator for New South Wales, John Williams, raised the subject of the supermarket ‘milk price wars’, asking Mr Sims what the ACCC was doing to stop it.

Referring to Section 46 of the Competition and Consumer Act 2010, which relates to misuse of market powers, Mr Sims said, “I think it is clear that the supermarkets do have a lot of market power. That is particularly the case in relation to their suppliers and of course also the case in relation to their consumers.

“What we need to do is to determine whether or not they are breaching the act. We really need people to come forward with complaints with the appropriate evidence. It would be terrific if they did that. But we are going to keep an eye on them. They do have a lot of market power.”