Brendan Nelson (Bradfield, Liberal Party) Share this | Hansard source

The Rudd government is considering legislation to deal with creeping acquisitions and, subject to scrutiny of the detail, it will have my support. In the space of two generations we have moved from a society in which churches pulled bigger crowds than clubs, corner stores were just that—on every corner—servos gave service under many brands and McDonald’s evoked humming about an old man’s farm. It happened very quickly, but then again it did not—at least, we did not appear to notice it.

When the government bowled up Fuelwatch and then GroceryWatch, as Liberal leader I could smell the stunt before seeing it and Australians could see it also. As opposition leader, I also observed that watching the price of petrol does not bring it down. Being seen to be doing something is not the same as actually doing it. We are now on the threshold of another change, and if it proceeds there will be no turning back.

Exxon Mobil oil owns 800 petrol stations across the country, selling petrol and anything else they can jam into the service station store. That is six per cent of the national convenience retailing market. Caltex and Woolworths have 32 per cent of the market and Coles and Shell have 24 per cent. Once, you were asked if you wanted oil or a roadmap; now it is, ‘Do you have shopper dockets?’ and, ‘Would you like five chocolate frogs for $2?’ If Caltex snares the Mobil outlets—and it is proposing in the first instance to buy 302 of them—we will be all but reduced in petrol retailing to what is already happening in groceries. The vertical integration of markets is important if not essential to national productivity and international competitiveness, but this is a bridge too far. The ACCC simply watching another acquisition by major players is likely in fact to put the price of petrol up.

Woolworths and Coles now have 70 per cent of the packaged groceries market, 60 per cent of dairy and deli and half the fruit, vegetables, meat and egg markets in this country. They also control half of the liquor market. Independent supermarkets are the competitive lifeblood of outer suburban, regional and rural Australia. In the space of 35 years, Coles and Woolworths have taken their share of the national retail market from 40 per cent to 70 per cent—they operate almost 1,700 stores. When one of these players buys an independent store in a suburb or region, it might be argued that it is only one store in one area that is being acquired. In reality, the nation is losing its competitive market. These successive acquisitions entrench market power. Some independent owners plead that they have a right to sell at the inflated price being offered by the big retailers. That premium that is being paid is the value of competition. It is also the future profit of a future small, independent operator.

If the government can resist the temptation of a stunt—a big call, I know—creeping acquisition legislation should enjoy the support of both major parties. It will certainly have my support. A firm that already has a substantial degree of market power should be prohibited from expanding or entrenching that market power by acquiring an actual or potential competitor. As Terry McCrann recently observed in one of his columns in the Herald Sun, it is a little bit like chopping down trees: if you chop them down one at a time you think you are just chopping down one tree, but before you know it you have actually chopped down a forest.

This will have consequences not only for groceries but for petrol refining, banking, gas and electricity. This is not just an economic issue, nor is it simply about power and competition. It is also about the kind of Australia that we want to shape for the next generation. Two players—in this case Coles and Woolworths—owning, controlling and selling everything from petrol to potatoes is, in my opinion, not a better future for the next or subsequent generations. I may sound a little like Nationals senator Ron Boswell on this issue. I am very happy to do so. But, if I start to look like him, can you tell me urgently!

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