The former head of the Australian Competition and Consumer Commission has warned regulators they should take a "great deal of caution" when investigating the activities of grocery retailers, particularly when it comes to market power.
Professor Allan Fels, who chaired the commission from its inception in 1995 to 2003 and is now dean of the Australia and New Zealand School of Government, told a retail competition seminar that the merger of Coles and Myer in Australia was a "tipping point".
The Australian market is now highly concentrated, with Coles Myer and Woolworths/Safeway holding an 80% share.
In the early 198os there were five major retailers and many independents and wholesalers until the regulator approved the merger of Coles and Myer in 1985.
This opened the way for Woolworths to buy Safeway. Wholesalers' businesses contracted as there was a shift from small shops. "Most people think this was a big mistake," said Fels. "There is widespread concern in Australia that this situation has developed."
He pointed to a number of cases where the big players had abused their position. Earlier this month the Federal Court ruled that Woolworths had acted anti-competitively by unfairly forcing small liquor outlets to reduce their business by not stocking the same brands as the supermarket.
Woolworths is refusing to accept the ruling. It comes just four months after the court imposed a record AUS$8.9m on it for price-fixing in bread.
However, Fels agreed with seminar chairman Michael Hutchings of the Competition Law Forum, that finding solutions was difficult. Many of the issues being raised by the anti-supermarket lobby did not come under Competition Law, delegates were told.
Dr Alan Riley from City Law School said NGOs and pressure groups were in danger of undermining their credibility with regulators. "When I talk to some of them their remedies go from very mad to a bit mad to some sane ideas. They are part of the problem, seeing supermarkets as wholly bad," he said.
"A lot of NGOs don't want to listen to you, which makes discussion difficult. Regulators take a hostile attitude to this approach."
Professor Allan Fels, who chaired the commission from its inception in 1995 to 2003 and is now dean of the Australia and New Zealand School of Government, told a retail competition seminar that the merger of Coles and Myer in Australia was a "tipping point".
The Australian market is now highly concentrated, with Coles Myer and Woolworths/Safeway holding an 80% share.
In the early 198os there were five major retailers and many independents and wholesalers until the regulator approved the merger of Coles and Myer in 1985.
This opened the way for Woolworths to buy Safeway. Wholesalers' businesses contracted as there was a shift from small shops. "Most people think this was a big mistake," said Fels. "There is widespread concern in Australia that this situation has developed."
He pointed to a number of cases where the big players had abused their position. Earlier this month the Federal Court ruled that Woolworths had acted anti-competitively by unfairly forcing small liquor outlets to reduce their business by not stocking the same brands as the supermarket.
Woolworths is refusing to accept the ruling. It comes just four months after the court imposed a record AUS$8.9m on it for price-fixing in bread.
However, Fels agreed with seminar chairman Michael Hutchings of the Competition Law Forum, that finding solutions was difficult. Many of the issues being raised by the anti-supermarket lobby did not come under Competition Law, delegates were told.
Dr Alan Riley from City Law School said NGOs and pressure groups were in danger of undermining their credibility with regulators. "When I talk to some of them their remedies go from very mad to a bit mad to some sane ideas. They are part of the problem, seeing supermarkets as wholly bad," he said.
"A lot of NGOs don't want to listen to you, which makes discussion difficult. Regulators take a hostile attitude to this approach."
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