Newsroom
‘Horse has bolted’: Merger laws just political ‘face-saving’ after divestiture ignorance
April 17, 2024
THE Federal Government’s merger laws reform, aimed at “boosting competition,” equates to “closing the door after the horse has bolted,” Katter’s Australian Party MP Bob Katter said.
Mr Katter, who for more than a decade has raised the alarm over the market concentration of the major supermarkets and more recently made repetitive calls for divestment of Coles and Woolworths, said the merger reform was a knee-jerk reaction by a government under pressure.
“More than 10 years ago myself and Clark MP Andrew Wilkie tried to move legislation to break up Coles and Woolworths, no one listened,” Mr Katter said.
“Now everyone is talking about divestment, almost the entire crossbench voted for it when I tried to move it in Parliament again last month.
“So the government is feeling the pressure. And when you feel the pressure, you either grow a spine and actually do something that will split up the giants or you run scared.
“The mums and dads of Australia need cheaper prices at the checkout. Farmers need more for their crops. Blind Freddie would see this means the supermarket giants must be reined in and their profits halved. Merger laws won’t do this. We must have the supermarket giants forcibly split – that can only be done through divestiture.
“The merger laws are some face-saving and wall-papering. When the house is falling down wall-papering is not going to overcome the problem.
“It's a bit late to be putting merger laws in now when there is only four or five people supplying electricity in Australia, where there's only two people supplying telecommunications, Foxtel completely dominates pay television, Qantas is almost a monopoly in Australia, Woolworths and Coles - if they're not a duopoly, they're certainly part of an oligopoly, Chemist Warehouse and TerryWhite in the supply of pharmaceuticals in Australia, and four banks run the show.
“Whatever is left out there - it almost doesn't matter - they're just the luxuries.”
Mr Katter said it was important to note that the recent Food and Grocery Code of Conduct Review did not disregard his interpretation of divestiture, rather the Greens and Nationals proposal.
Mr Katter said his divestiture proposal was a forced breakdown of the major supermarkets over five years, down to 20 per cent market share, while the Greens proposed “selling supermarkets if caught doing the wrong thing.”
“When you’re paying the farmer 45c for a kilo of potatoes and then selling them for $4.90 at 800 per cent mark up, how is that not already doing the wrong thing?”
Mr Katter his proposal was evidenced by other developed nations such as the United States and Great Britain.
In the United States the top 10 grocers collectively operated 60 per cent of the market. [1]
Meanwhile in Great Britain, the top 10 grocers had 90 per cent of the market share between them, with the biggest player Tesco holding about 27 per market share.[2]