New legislation is being introduced into parliament this week which will give the Australian Competition and Consumer Commission (ACCC) the ability to break up companies that are abusing their power in the market — *cough cough* Coles and Woolworths *cough cough*.
That’s right folks, Australia’s least favourite power couple Coles and Woolworths could be forced to call it quits by the ACCC if new legislation proposed by the Greens is passed in the Senate. God, I haven’t been this hyped for a break up since Pete Davidson and Kim Kardashian started dating.
Coles and Woolworths have been the centre of attention in Australia for the best part of two years now as the supermarket duopoly has consistently reported higher and higher profits during a cost of living crisis. The same cost of living crisis that has seen households find it increasingly harder to afford staple groceries — coincidence???
As accusations of price gouging have been thrown at the companies, the toxic couple has found themselves embroiled in investigations by the ACCC and Senate to suss out if anything dodgy/exploitative has occurred to drive up company profits.
And now, thanks to a bill proposed by the Greens, the ACCC could soon have the power to introduce divesture powers as a consequence for companies who aren’t playing by the rules — or who are bending them so far that Vegemite costs $10 suddenly.
How would the ACCC break up Coles and Woolies?
As explained by Greens senator and economic justice spokesperson Nick McKim, the bill would give the ACCC the power to “smash the supermarket duopoly” by forcing them to sell their assets as a punishment.
Though it may sound counterintuitive, forcing a business to sell assets is a surprisingly effective way to take away its market power. McKim has argued these powers should be made an essential part of the ACCC’s toolkit.
“This isn’t a controversial or radical proposition. The UK has this power, and the US has been using it for well over a century,” said McKim.
“The very existence of divestiture powers will mean that dominant supermarkets, banks or energy companies will think twice about pocketing higher margins and instead pass on savings to their customers.”
In the case of Coles and Woolworths, if the ACCC hypothetically found them guilty of inflating prices unfairly for the consumer, profiteering, or acting in any way that prevents competition in the market, then the duopoly could be made to sell specific stores, or even lines of home-brand products.
This way a competitor business, local or international, could purchase that store or product line, and offer the consumer a similar product/service for a competitive price. Therefore applying a downward pressure to the grocery market that simply cannot occur in a duopoly environment.
“The market domination of Coles and Woolworths gives them the power to crush farmers, squeeze out competition and shaft their customers,” McKim said in a statement.
“It’s time that the interests of people took precedence over the profits of corporations.”
Currently, when a company is found to have behaved improperly by the ACCC, a company or individual can receive penalties and fines in smaller cases, or jail time if the offences are criminal.
When will the bill be voted on?
The bill is expected to be introduced by the Greens to the Australian Senate this week, with the legislation already gathering interest and support from the National Party.
Yes, you read that right: Greens and Nats VS Coles and Woolies. Truly the doubles match of the century.
“We are going to work with them,” said Nationals leader David Littleproud, per ABC.
“This is about transparency and fairness, and that’s all farmers want, and I think that’s all consumers want.”
McKim welcomed the Nats’ support, and said that the Greens will seek support from everyone they can: “From the Government, to the Coalition and crossbench, because I have no doubt that most Australians support it.”
The unlikely pair takes on the toxic power couple. You love to see it.
