Business

Much to do to protect competition in the retail sector

Speaking at the AFR Retail Summit in Melbourne, Australian Competition and Consumer Commission Chairman Rod Sims stressed the importance of competition.

“Competition is essential to our economic prosperity; it drives innovation and productivity, and it lowers costs and improves product quality,” Mr Sims said.

“While all economists welcome competition, of course businesses usually do not.”

Mr Sims noted many promising signs for competition in retail. “In particular, competition is benefitting from online sales challenging the established bricks and mortar stores,” Mr Sims said.

“Going forward, our main competition role in retail will be to ensure new entrants are not prevented from competing on their merits. We will, therefore, be alert to the consequences of large firms acquiring promising start ups, we will closely monitor access to data issues, and we will continue to support the proposed Harper changes to section 46,” Mr Sims said.

Mr Sims then went on to discuss using laws to good effect, addressing supply chain issues and ensuring honest promotional claims so as to enhance competition in the retail sector.

Mr Sims backed the Harper Review’s calls to ensure retail regulations around liquor licencing and planning and zoning don’t have unintended competition consequences.

Mr Sims said the ACCC has used the competition provisions of the Competition and Consumer Act 2010 to good effect in several areas of the retail sector.

He said the ACCC’s interventions had benefitted competition in areas such as restrictive supermarket leases and petrol retailing.

In providing an update on supermarket supplier issues, Mr Sims said the ACCC has seen changes in the way retailers behave, but the problems have not been solved.

“We are looking at reports of behaviour associated with the [Food and Grocery] Code and we are advising suppliers who have concerns about their dealings with the supermarkets to raise them with the ACCC, confidentially if required,” Mr Sims said.

Following actions involving Nurofen, Coles par-baked bread and Paddle Pops, Mr Sims said providing consumer protection will very often enhance competition and the benefits that flow.

“The Australian Consumer Law protects consumers, but it also has a powerful effect on competition. It enables businesses and retailers to compete on their merits, not falsehoods.”

Mr Sims also told retailers that consumer guarantees and product safety are key areas of focus for the ACCC in the retail sector.

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