Major retailers face possible breakups following price gouging allegations

With the cost of living constantly on the rise, consumers struggle to keep up with necessities.

In a bold move that could reshape the Australian grocery landscape, the Opposition proposed a plan that could see retail giants gone.

This controversial idea sparked a fiery debate nationwide, with shoppers, farmers, and politicians weighing in on the potential impact of such a drastic measure.


A coalition proposal to break up retail giants—Coles, Woolworths, and Bunnings—was raised should the Opposition win the next federal election.

According to Opposition Leader Peter Dutton, they would grant consumer watchdog the Australian Competition and Consumer Commission (ACCC) the power to enforce divestiture as a last resort to address anti-competitive behaviour by the major chains.

In extreme cases, the ACCC could force a supermarket to sell off parts of its business to increase market competition.


compressed-supermarkets.jpeg
Supermarket giants Coles and Woolworths could face divestiture should the Opposition's proposal pushes through. Image Credits: Shutterstock/Kym McLeod, Jane Malone


Dutton argued that this plan would not only protect customers at the checkout but also align Australia with similar powers in the United States of America and United Kingdom.

'The situation in Australia at the moment is that there's a massive concentration of market share within the two major companies, within Coles and Woolies,' Dutton said in an interview.

'There are many complaints, and validly made by consumers as well, who are worried about what it means when they go to the checkout with ever-increasing prices.'


As a safeguard, Dutton assured that measures would be put in place to prevent job losses.

For the powers to be applied, a court would have to find that divestment would result in a substantial improvement in competition and should be of public interest.

However, the Albanese Government dismissed the proposal, with Prime Minister Anthony Albanese likening it to a 'Soviet-style solution'.

Instead, the government planned to implement a mandatory Code of Conduct for how supermarkets treat suppliers, with hefty fines reaching $10 million for breaches.

Treasurer Jim Chalmers criticised the Opposition's proposal as a 'half-baked idea'.

'When it looked at this matter, it said that the risk was that it could actually make things worse, not better,' he stated.

'It found that forced divestiture resulted in a supermarket selling some of its stores to another large incumbent, or in forced closure of stores.'


The Greens, on the other hand, welcomed the push for divestiture powers.

Greens Leader Adam Bandt urged the Government to recognise the financial strain consumers are facing.

Nationals Leader David Littleproud also echoed the same sentiment, citing the disparity between the prices farmers receive for their produce and what consumers pay at checkout.

Despite these arguments, Assistant Competition Minister Andrew Leigh stated that attempts to break up the supermarkets do not make sense.

'This is a power which is rarely used in other countries. We are focused on getting measures which will benefit Australian households,' Leigh argued.


The debate over supermarket pricing and market power is not new.

In a previous article, a Greens-led inquiry into supermarket pricing previously recommended breaking up the supermarket duopoly to prevent market abuse.

The inquiry recommended amending the Competition and Consumer Act 2010 to make price gouging an offence.

However, a separate review by former Labor minister Craig Emerson advised against such a move, warning of reduced competition and job losses.
Key Takeaways

  • Opposition Leader Peter Dutton proposed using divestiture powers to address anti-competitive behaviour by major supermarket chains, should they win the next federal election.
  • The Albanese Government opposed the 'Soviet-style' plan and instead focused on imposing a mandatory code of conduct for supermarkets.
  • The Opposition's proposal aimed to help small businesses and farmers, but some experts feared divestiture could lead to less competition and job losses.
  • A Greens-led inquiry supported the idea of breaking up the supermarket duopoly to prevent market share abuse. The Nationals also called for action as both farmers and consumers face price discrepancies.
What are your thoughts on this issue? Have you felt the impact of rising prices at the checkout? Share your experiences and opinions with us in the comments section below.
 
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First Dutton came out with the big "nuclear will save the country " boast and that fell flat on his face
Now it is the big-" I will break up the giants if I am elected "crap
Dutton under scomo had the opportunity long ago to rein in the big players but as they contribute massive amounts to the LNP political coffers, they sat on their bums and did nothing.What Dutton and the nats lap dog are saying now, is just kite flying as it sounds tough in the now days but the odds are 100 to 1 against any action if he gets elected because the giants will just pat him on his bald spot and say" good little doggie, you chased the nasty ALP flies away so now we can get back to the rip off and gouging business"
Point is-- we have all this blow hard bullshit from the LNP so often before that if he was serious , it would be a bi-partisan effort NOW to pull the giants into line --not after an election
 
The only difference between Liberal and Labour is the spelling. Neither party gives a hoot about the citizen they are supposedly representing. Time to get away from the 2 party system, like Dutton proposed to break up the big 2 supermarkets we could do ourselves a big favour by voting in another party such as One Nation.
 
I think the fines against supermarkets exploiting the consumer is a great idea and putting a cap on how much food prices can go up. Preventing job loss MUST be taken into consideration. It is hard enough to survive with a wage coming in but the job losses would be devastating to so many families/people. We are NOT America (thank God) nor do we want to be run like them. This is MY opinion only and everyone is entitled to their own opinion. Have a lovely day everyone in this cold :)
 
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First Dutton came out with the big "nuclear will save the country " boast and that fell flat on his face
Now it is the big-" I will break up the giants if I am elected "crap
Dutton under scomo had the opportunity long ago to rein in the big players but as they contribute massive amounts to the LNP political coffers, they sat on their bums and did nothing.What Dutton and the nats lap dog are saying now, is just kite flying as it sounds tough in the now days but the odds are 100 to 1 against any action if he gets elected because the giants will just pat him on his bald spot and say" good little doggie, you chased the nasty ALP flies away so now we can get back to the rip off and gouging business"
Point is-- we have all this blow hard bullshit from the LNP so often before that if he was serious , it would be a bi-partisan effort NOW to pull the giants into line --not after an election
I agree with you 100% well said.
 
I won't say Albanese has been doing it all right, but ever since Duttons party was kicked out he has whinged about the financial mess. Umm you guys created it. Being in opposition is the easiest political party to be in. All full of good ideas, but when it comes time to action them in office there's a problem.
 
Sure, everyone has felt the impact of rising prices. All the different political ways of fixing the issue reminds me of the different political ways of fixing the housing crisis yet there are 10 reasons why it can't be fixed, but this pricing issue can be.

All other countries that introduced divestiture don't really use the laws, except very rarely. So would that really do the job of stopping price gouging or stopping unfair price rises in some instances?? Sounds like it would just be a massive upheaval for many thousands of Australians with stable jobs with little positive impact upon us consumers. Furthermore, the duopoly will just push hard on lifting prices knowing any body would be loath to or scared of making the huge divestiture decision.

So, Dutton running off with his 'I'm tough, I will make the bastards hurt for your pain banner' is pure desperation popular vote political stunt stuff that won't work.

Labour don't like to take action against anything the unions might say will harm workers positions, so they may agree to an independent mandatory code of practice. But will it go far enough.

I think a set up like what the banking system has to do now, following the RC, where very high end fines have been imposed and have had a positive impact on the banks behaviour in terms of making money laundering much harder for criminals. So the point is NOT about whether I think banks are good, but more so what they sit up and take due notice of to the degree it changes their behaviour. And they have changed behaviour on this issue.

I think a code, ultimately established by an independent body, that has real teeth and the authority to fine high end multi-million if not billion $ fines on any grocery retailer granted the privilege of selling to the Australian public and proven to be price gouging or unfair pricing or unfair behaviour towards suppliers would be an improvement over what we have today, or any type of future divestiture laws. I think it would work.

It would no doubt make shareholders and the duopoly sit up, take notice and more importantly ACT in way that will not have the bad impacts upon almost all Australians it is having today.


I am aware of the very strong desire of some to inflict the level of pain that divestiture laws would bring to the duopoly, but I worry about the unintended consequences for the workers and others this would have. Dutton's or the Greens reassurances on that line leave me cold.

Given that divestiture laws are not really used by others, maybe a compromise of giving an independent body the authority to recommend or indeed approve divestiture actions against a company (as well as fines) would be the best compromise.

But will ideology once again impose itself to the detriment of most Australians.

Where oh where is the strong, calm and fair minded statesman we crave.

Free enterprise is good up to the point that greed hijacks the benefits it brings. All we have to do is manage that greed of others.
 
First Dutton came out with the big "nuclear will save the country " boast and that fell flat on his face
Now it is the big-" I will break up the giants if I am elected "crap
Dutton under scomo had the opportunity long ago to rein in the big players but as they contribute massive amounts to the LNP political coffers, they sat on their bums and did nothing.What Dutton and the nats lap dog are saying now, is just kite flying as it sounds tough in the now days but the odds are 100 to 1 against any action if he gets elected because the giants will just pat him on his bald spot and say" good little doggie, you chased the nasty ALP flies away so now we can get back to the rip off and gouging business"
Point is-- we have all this blow hard bullshit from the LNP so often before that if he was serious , it would be a bi-partisan effort NOW to pull the giants into line --not after an election
So true. The LNP could have done this when in office. It's not a new situation, just that the media is making mileage out of it now.

Controversial, but I think nuclear is not a bad idea. It's just that no one wants it in their backyard.
 
It's become a much bigger issue only because of the "cost of living crisis". Sadly, we now live in a world of the rich getting much richer and the middle class struggling to keep themselves going and the poor getting very much poorer. In this modern era there is a thirst for more. And the only way to get more is to have someone pay for it. Profits over people. Some in the world are using this "crisis" as an excuse to increase prices way way way more than they need to. That is why rents are through the roof, houses being sold for three times the price of a few years ago, increasing grocery prices, insurance premiums. It all trickles down to the last rung on the ladder - the consumer. Because everyone is doing it, the consumer with the smallest income feels it the most. While we hope things will change, it's unlikely. Greed has always been in the world, but now it's out of control and no-one can fix it. We are all in for a very bumpy ride.
 
Yes food prices are going up, but a big part of those increases are production costs, with the cost of wages and running costs. My issue at the moment is everyone wants to lay into the Supermarkets, why isn't anyone doing anything about the Gas, Electricity and Petrol companies. I pay monthly for my Gas and Electricity, and with both I used less in June 24 than I did in June 23 but paid almost 20% more, and I'm supposedly on the best pricing schedule. Sure the Governments give rebates to help offset the cost, but then they just tax more (the tax cut is well and truly offset by the bracket creep and introduced other state and federal taxes). Any savings I had are absolutely eaten up by the cost of living increase, but the biggest monster is the Gas and Electricity Companies.
 
Yes food prices are going up, but a big part of those increases are production costs, with the cost of wages and running costs
Same point made by Energy people, just called cost of supply.
I feel the pain of energy increases as well, so understand yours.
With energy, Howard and others did not look to the future when giving our resources away unlike other governments who secured citizens future regarding resources.
At least there are other energy providers that are easily and quickly switched to (unlike for many would find it difficult to move to other shops). How much of a benefit that is (by swapping providers) I am yet to find out, but will shortly.
 
Click on the link to enlarge and read this story I found ,nothing has changed and never will.
Very interesting article almost 74 years ago bar 3 days.
I know I'm being facetious, but the prices have changed quite a bit!

Pork seems to have been a luxury meat back then.

Butchers were also critical about the continued control of meat prices, citing meat available to them for sale at the fixed ceiling prices was "inferior and only fit for putting through the mincer or making into sausages"
 
Please get rid of them big companies and bring the ones like Franklands back again
Who are Franklands? If you mean Franklins they went bad and would have closed completely had another company not bought them.
 

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