Joel Fitzgibbon (Hunter, Australian Labor Party) Share this | Hansard source

I congratulate the member for Kennedy for raising the topic of supermarket competition for discussion this afternoon. Everyone who has made a contribution has been very sincere—the member for Kennedy talking about his potato farmers, amongst others; the member for Forrest talking about her dairy producers, in particular; and the member for Fraser advocating very strongly on behalf of consumers. This is the very nature of this debate: the argument on the side of the producers, who are obviously doing it tough, and the argument on the part of consumers, who benefit from low prices and very competitive arrangements.

There is no doubt, though, that there is something wrong. Sometimes the evidence is hard to find, but producers are doing it tough for a whole range of reasons—including drought and oversupply in a particular industry. For example, we have an oversupply in the wine industry in my electorate because of excessive planting of vines. The list goes on and on, but life on the land is particularly tough. I was just having a conversation with the Parliamentary Secretary for Agriculture, Forestry and Fisheries on this very issue.

I was elected into this place in 1996 and in 1999 I was delighted when the Howard government established the Joint Select Committee on the Retailing Sector. It came after enormous pressure from the National Association of Retail Grocers of Australia, who represent the independent supermarkets and were concerned about the growing market power of Coles and Woolworths. There are a number of factors in this debate. One, of course, is that we do have a very high market concentration in this country of somewhere between 70 and 80 per cent, depending on the subsector you are talking about—whether it is fresh fruit or other goods. There is no doubt about that, even though we have had the injection of Costco and ALDI into the marketplace. That has been very welcome. Market concentration remains very high, but it is a bit like comparing apples and oranges when you compare Australia with our 22 million people with the United States where there are in excess of 300 million people. The second matter of fact is one I have already mentioned, and that is that farmers are doing it tough. There is no doubt about that.

The third fact is that consumers are enjoying, generally speaking, lower prices. The fourth is that, when you have a look at the annual reports of Coles and Woolworths, you will find that the shareholders are enjoying a return of between six and seven per cent, which challenges the idea that because of their monopsony power—their purchasing power—Coles and Woolworths have a licence to print money. It simply is not true. Unless those two organisations are charged with lazy inefficiencies, you ask yourself: are they benefiting at the expense of rural producers? I do not know the answers, and no one has really proffered any logical answers here this afternoon. But it is a debate that we need to keep having in this place. There is too much evidence of people in the agricultural sector doing it tough, partly because of the market power of the likes of Woolworths and Coles.

In 1999 we had that inquiry. I went into it very enthusiastically with the interests not only of producers but also of the smaller players in the retail sector in mind and determined to do big things. We did do a few things: we recommended and had adopted some reasonably modest changes to the Trade Practices Act, to the capacity of rural producers to bargain collectively and an amendment to section 50, which allowed the definition of a market to be extended to a regional market. There were changes to section 46 of the Trade Practices Act—that is, the abuse of market power. They were not large but they were changes nonetheless. We got an industry code of conduct and we got an ombudsman. The list goes on and on. It is evident, given some of the concerns being expressed by members from both sides, that not much has changed.

In my own electorate, I get so frustrated with the plight of those in the dairy industry, but there are myriad reasons why the dairy industry is doing it tough. I get particularly frustrated by the plight of my vignerons, who cannot sell their wine at the cellar door these days more cheaply than Dan Murphy's in Sydney can. Whereas once upon a time Sydney residents took a drive to the Hunter for the unique cellar door experience and for some cheap wine, they can now buy it more cheaply in Dan Murphy's in Sydney, in their home town. Nothing illustrates better than that the sheer market power of the Coles and Woolworths of this world, which represent about 80 per cent of the liquor market. I talk to people in this place all the time and to producers all the time—I listened to the member for Kennedy this afternoon—and I ask: what is the solution? No-one this afternoon offered any. No-one in my electorate offers one either. Divestiture is possible, actually, following some changes to the Trade Practices Act. The ACCC does have the capacity to force divestiture in the event of a very deliberate abuse of market power.

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