Andrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Competition, Charities and Treasury) Share this | Hansard source

It is half a century ago, Member for Kennedy. As David Merrett notes in his book, Coles and Woolworths accounted for most of their competitors through a series of acquisitions. Six years after they entered the market, their share was 20 per cent. By the time the member for Kennedy first became a MP in 1974, it was nearly 40 per cent. Twenty years on and the two big supermarket operators had more than 60 per cent of the market.

We saw in the 4 Corners recent report that now for every $10 Australians pay for groceries, $6.50 is spent at Coles and Woolworths and just $1 at ALDI. That 4 Corners report had a story of a cherry farmer who sent 15 tonnes of cherries to Coles, an entire semitrailer load, expecting to receive $90,000. Instead, he was told it was not up to standard and got less than $6,000 on the seconds market. He said, 'So that is market power when you can simply reject something for no good reason.' Another supplier told the story of asking to be paid five per cent more and being told that request would only be approved if he paid Coles $25,000. We have seen accounts of farmers being asked to pay so-called rebate charges in order to have their invoices paid on time. Fruit Growers Victoria have said many members have had little choice but to agree to pay rebate charges sometimes as high as four per cent to get their invoice paid on time. The operations of the large supermarkets mean that they are now tending to buy direct. One report said that, in Queensland, 10 to 15 years ago some 80 per cent of fresh produce ran through the central market at Rocklea. Now 80 per cent is sold directly to supermarkets.

I want to draw particular attention of the House to a report, Australian food story: feeding the nation and beyond, from a committee ably chaired by the member for Paterson. That spoke of the challenges of the supermarket duopoly and quoted the National Farmers Federation about the lack of transparency in the supply chain. It called for a review of the Food and Grocery Code of Conduct, to consider whether it should be made mandatory. The government is doing just that, and I thank the member for Paterson for this important work on this important report. The government has charged former competition minister Craig Emerson with reviewing the Food and Grocery Code of Conduct, and his consultation paper specifically goes to whether it should be made mandatory.

Since coming to office, the government have increased the penalties for anticompetitive conduct and we have banned unfair contract terms. We have set up a competition taskforce in Treasury which is actively considering issues such as reviewing Australia's merger laws and considering whether noncompete clauses that apply to one in five workers and are used by one in five firms ought to be reformed in order that workers can more easily have the freedom to go to a better job. We've tasked the Australian Competition and Consumer Commission with a review of the supermarkets that will report this year on the conduct of the supermarkets and any reforms that need to take place. And in order to deliver immediately for consumers, we are funding CHOICE to do quarterly price monitoring, ensuring that consumers know where the best deal is available.

I started with sport, let me finish with it. Sometimes collusion reminds me of a story that David Williamson told about making the movie Phar Lap. He said, 'We had to replicate the exact winning order of the horses in the 1930 Melbourne Cup, which Phar Lap won. I remember asking some of our jockeys whether it was possible to do this. They looked at each other and burst out laughing. Sure enough, the horses crossed the winning line in perfect order, and every one of the jockeys looked as if he was trying his heart out.' We don't want an Australian economy that looks like the movie depicted by David Williamson in that quote.

See this speech in context