Dr Dennis Jensen MP

The Australian Competition and Consumer Commission this week launched its latest assault, choosing Australian Airports as its next target. The ACCC says it “is stepping up pressure to smash the monopolistic powers of the country’s leading airports”.

My reaction to this announcement, a blood curdling scream that had my staff scared half to death.

Last week it was time to talk tax, this week airports but why do we refuse to address, let alone discuss the toxic monopoly that is choking our grocery market? Woolworths and Coles between them now account for more than 80% of grocery sales. Australia has the most concentrated Grocery Market in the world. The ACCC’s terrible track record as a regulator aside, are Airports really the most pressing competition problem Australia is facing?

In 2007 the Senate Standing Committee on Community Affairs released its report, A decent quality of life. The committee investigated the impact cost of living pressures are having on older Australians, its findings should make us all question why the Government refuses to act on this issue.

The Committee was inundated with research from various interest groups. However most telling was data from the Australian Bureau of Statistics showing that fresh foods such as vegetables, fruit, and meat varieties have seen significantly higher rates of price increase compared with either the Consumer Price Index or food in general.

This ABS data also saw analysis by PricewaterhouseCoopers with findings showing that the rate of price increase in food as a whole and in fresh food in particular can be traced to an increasing concentration of the retail grocery market and the vertical integration of fresh food supplies.

Buried in the PWC report was one of the most insidious findings you will likely find in a report of this nature:
“It appears that food price inflation has potentially boosted supermarket and grocery store turnover as a proportion of total retail turnover. There are also suggestions that the measured level of food price inflation may underestimate the true rise in the cost of grocery goods.

That is, the MGRs may be running ‘loss leaders’, or providing lower prices, on high volume food staples included in the CPI food basket, thereby hiding the rise in prices of other grocery goods which are growing at a greater rate. “

Even if the ACCC can find some justification to ignore the 80% market concentration of Coles and Woolworths, how does the ACCC explain away the deliberate manipulation of the CPI index and obvious price collusion by these two multinationals?

Grocery pricing is a function of competition. Make competition a fairer, more transparent process and you fix pricing.

Further, how exactly does the ACCC conclude that a supposed Airport Monopoly is having a wider impact on all Australians compared with of the grocery market?

Recently we have seen Occupy Wall Street Protests highlight the control America’s financial sector has over that nation’s leaders, its economy and the average worker.

Australia’s equivalent to America’s financial sector is surely the Grocery Market.

I would not begrudge an issue driven organisation such as GetUp! picketing Rod Sims and the ACCC in an attempt to get them to move on the Grocery Monopoly, as swiftly as they are moving on airports. The ACCC must take action to dismantle the largest grocery duopoly in the world.
As the Coalition we must be willing to take this is a fight into government.

If we are to be the party who believes in a free market and small business, we must enforce this central tenent of our charter. With an issue that affects so many Australians we cannot afford to be gun shy. The Coalition should be prepared to draft policy breaking up Coles and Woolworths if the ACCC refuses to act on these clear breaches of competition and consumer law.

We are either a Party who believes in the free market and fair competition, or we should amend our party platform and keep quiet.

If this issue does ever reach a sensible resolution and Coles and Woolworths are forced to reduce their market share, be prepared to see commercials seeking to influence the debate. Look forward to upbeat inspirational music and average grocery workers spruiking the benefits of such large enterprise. Think Gillard’s Carbon Tax ads… but even more bananas.

The ACCC, under governments of both persuasions, has not stopped the slide to hyper-concentration. If that is because of deficiencies in legislation or deficiencies of regulatory activity, the matter must be considered by Federal and State Governments.

The ability of every Australian to live comfortably is at stake and must be addressed before another fringe issue gets right of way.