Metcash: Woolworths and Coles Accused of Land Banking

In the ongoing Senate inquiry into supermarket prices, it has come to light that Australia’s dominant supermarket players, Woolworths and Coles, have been utilising a legal yet under-the-radar tactic known as “land banking” to stifle competition from independent grocers. Essentially, they acquire property or undeveloped land and hold onto it, leveraging their market dominance to sway developers, landlords, and even state governments in their favour.

Grant Ramage, CEO of Metcash Food, which oversees the IGA, Foodland, and Campbells brands, emphasised how Woolworths and Coles’ sheer size and financial clout enable them to engage in this practice. Despite its significant impact, land banking often goes unnoticed as the grocery giants are not obliged to report such acquisitions to competition regulators.

Metcash, with its much smaller market share, has raised concerns about Coles’ and Woolworths’ unchecked growth, highlighting their anticompetitive behavior. In some instances, Metcash found itself compelled to match high offers from Coles, ultimately affecting the viability of independent supermarkets.

Calls for stronger legal frameworks to monitor and regulate such activities have been made, with suggestions including mandatory reporting of all purchases by dominant market players. However, proposed divestiture powers, advocated by some, are met with scepticism by industry players like Metcash and Aldi, who fear unintended consequences such as reduced consumer choice or job losses.

Meanwhile, Woolworths and Coles have defended their expansion strategies, emphasising their focus on serving communities and meeting growing demands. They point out that their developments often stimulate competition by attracting independent retailers to nearby areas.

While Aldi is not currently present in Tasmania, logistical complexities are a barrier to expansion in more remote locations. However, the company remains open to future opportunities for growth.

The Senate inquiry continues to delve into these issues, with key figures from Woolworths and Coles scheduled to appear for further examination.

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