Master Grocers Association wants more government intervention against supermarket majors

Posted by AFN Staff Writers on 14th August 2012

The Master Grocers Association and Liquor Retailers Australia (MGA) has released a statement claiming that the independent supermarket industry is at risk of being wiped out completely by the duopoly that is Coles and Woolworths. In an industry report called ‘Let’s have fair competition,’ the MGA claims unless regulatory authorities such as the Australian Competition and Consumer Commission (ACCC) and additinal state and municipal government planning legislation is enacted,  then smaller independent supermarkets will continue to suffer.

The MGA’s report examines the last decade of large growth experienced by the Woolworths and Coles chains and how their “massive market power” has resulted in detrimental economic effects for smaller competitors. In addition,  MGA has urged a reassessment of government approval for large and “oversized” supermarkets in areas of little or no forecast population growth.

Mr Jos de Bruin, CEO of MGA/LRA said, “We want a ‘fair go’ for the smaller independents. It’s time to take action against this powerful Goliath that is growing stronger every day. If the Regulators sit back and do nothing to foster fair competition in the grocery and liquor retail industry, then the Australian consumer will literally pay the price in the long term.”

Mr de Bruin denied that his organisation  was asking for a diminishment of supermarket competition but rather that the independent supermarket industry needed to be supported by a regulatory regime of “fair competition.”

According to its published history, the MGA going back to 1898 has had two industry specific objectives:

–          to unite members of the Victoria Retail Grocery Trade for protection, defence and mutual benefit; and

–          to give members an opportunity of cultivating a spirit of good will and friendly feeling towards each other.

In recent years, the MGA has absorbed the National Association of Retail Grocers Australia (NARGA) South Australian State Retailers Association (SRA) and the Liquor Stores Association of Victoria (LSAV) which resulted in the forming of Liquor Retailers Australia.

The MGA is urging local and state governments to strengthen retail assessment criteria, including a retail sustainability assessment and to improve activity centre planning.

Contrary to the approach taken by the MGA in calling for more direct intervention, Australian Food News recently reported on Patties Foods financial results that demonstrate a different tack on how a company has been succeeding against strong competitive pressures from the major supermarket duopoly. As reported, innovation and new technology and finding new and alternative distribution channels to the conventional supermarket approach all seem to have been working for Patties. A question may well be asked as to how the MGA is promoting retailing innovation and stronger branding for its members.