Page 4134 - Week 10 - Wednesday, 21 September 2011

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applying them to relevant government policies and plans. However, it now looks like the government have not quite figured out how to apply the results in supermarket competition policy in many meaningful ways. I will come back to this, as I want to outline a number of areas where the government could improve their processes, which would help all stakeholders in the ACT supermarket system, including all operators, large and small, as well as the ACT community generally, and suppliers. I previously raised some of these issues in my motion about supermarket competition in 2009, but the issues have not been resolved and, hence, we are revisiting the issue.

As was made clear in the 2009 Martin review of ACT supermarket competition policy, there are significant market power issues in the supermarket sector, largely due to the market dominance of the major supermarket chains. In 2009, the last official collection of figures, Coles and Woolies dominated Canberra supermarket sales with about 72.2 per cent of ACT supermarket turnover. It is worth noting that, of that, Woolworths alone has 51.6 per cent of the market share, and for the south side of Canberra it is closer to 55 per cent. According to the Sydney Morning Herald, Coles and Woolies have 80 per cent between them of Australia’s supermarket turnover.

I understand that some of the parties here today are not concerned about who the operators of supermarkets are, as long as they continue to provide groceries to ACT residents at what they hope will be competitive prices. However, ownership and control of markets matter to consumers and suppliers. As UNSW Associate Professor Zumbo said, Coles and Woolies charge higher prices where they are the only two players. However, they charge less for the same products where there is a viable third-party player, such as Aldi. Professor Zumbo also stated that the Coles-Woolies duopoly was the reason Australia had the fastest growing food prices in the world as of 2009 when the OECD did a survey. The situation is so bad that competition minister Craig Emerson said in 2009:

We’re taking on hard measures by taking down the barriers to competition with Coles and Woolworths.

However, as yet, the commonwealth has not taken effective action. In fact, the situation is worse. Cole’s and Woolworths’ subsidiary companies in hardware, liquor, clothing and department stores are expanding, and Coles and Woolies have recently acquired most of the petrol station operators in the ACT.

The ACCC also found that, if independent stores could achieve better wholesale terms of supply for dry groceries, that, combined with the existing quality and keen pricing of fresh product, could make largely independent stores in particular a more telling force against the major chains.

In his review, John Martin sought specifically to ensure that there was viable competition for Woolies and Coles in Canberra for the benefit of Canberra consumers. This requires viable alternatives for Canberra supermarkets, and Mr Martin was particularly keen to ensure that alternatives were big enough to have a competitive wholesale supplier. So far this does not appear to have happened.

There are around 10 other companies in the ACT’s supermarket space, including a large number which are franchises run by family-owned businesses, largely, but not


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