The alleged hoarding of land by Coles and Woolworths to shut out competitors will come under the microscope of federal and state governments, who will seek to change zoning laws to open up development for smaller chains.
The federal government is also providing the competition watchdog with a further $30 million to aid a crackdown on “misleading and deceptive pricing” and “unconscionable conduct” by supermarket and retail giants.
Prime Minister Anthony Albanese said the government was getting tough on “dodgy” supermarket behaviour, in the wake of claims the supermarket giants had deceived customers.
“We don’t want to see ordinary Australians, families and pensioners being taken for a ride by the supermarkets, and we’re taking steps to make sure they get a fair go at the check-out,” Mr Albanese said in a statement.
Coles and Woolworths are being taken to court by the competition watchdog over allegations the pair deceived customers with fake discounts through their ‘Prices Dropped’ and ‘Down Down’ campaigns.
Mr Albanese pinned cost-of-living pains on the giants, saying those behaviours, if proven, could have pushed up inflation further.
The Australian Competition and Consumer Commission (ACCC) continues to inquire into the sector, and the government says the additional funding will allow it to conduct more investigations and enforcement into supermarkets and other retail brands.
That will include proactive monitoring of prices and closer scrutiny of retailers who “falsely justify” higher prices.
Treasurer Jim Chalmers said the funding for the ACCC would make grocery pricing fairer, boost competition and make sure there were “consequences” for wrongdoing.
Land banking concerns revisited
Mr Chalmers will also begin discussions with his state and territory counterparts to reform planning and zoning regulations, which the government says will enable more sites to be opened up for competitors to Coles and Woolworths to enter the market.
The government said current planning and zoning rules, including land-use restrictions, were acting as a barrier to new businesses entering or expanding.
The ACCC said last week it would scrutinise “land banking” claims further before delivering a final report next year, with the ACCC supermarket inquiry interim report released between them.
The head of Metcash Food, owner of IGA and Foodland, told a Senate inquiry in April that the supermarket giants had purchased properties to “turf out” independently owned stores at the end of their leases, and sat on undeveloped land to tie up sites that could otherwise have been bought by competitors.
Former Woolworths boss Brad Banducci told that inquiry the company did not engage in land banking in the “traditional sense” but that there could be a lead time of as long as a decade for new developments, and Woolworths did seek to invest in “growth corridors”.
Coles chief executive Leah Weckert told the same inquiry its approach was similar, and stores would eventually be built when there was sufficient infrastructure and population.
That inquiry found that while Coles and Woolworths described those practices as different to land banking, “in fact, the descriptions given above could arguably describe land banking”.
In 2008, when the ACCC last comprehensively examined the supermarket sector, Coles and Woolworths agreed to end “restrictive provisions” in their leases with shopping centres that locked out competing brands from opening in the same locations.
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