The opposition, led by Peter Dutton, is developing a robust legislative proposal to reign in the power of supermarket giants Coles and Woolworths. This initiative, commonly referred to as the “big stick” law, is intended to combat anticompetitive behaviour and prioritise consumers’ interests, particularly as the nation gears up for a federal election.
Under the leadership of shadow treasurer Angus Taylor and Nationals leader David Littleproud, the opposition is engaged in advanced discussions regarding new divestiture laws. These laws would grant authorities the power to potentially break up supermarket conglomerates if they engage in practices detrimental to fair competition. While specific details are still being finalised, the proposed laws would serve as a significant deterrent to anti-competitive behaviour, with court-enforced divestiture of assets being a last resort.
Unlike broader economy-wide powers, which the Coalition fears could unsettle the private sector, these laws would narrowly target supermarkets. Drawing inspiration from similar legislation in the United States and the United Kingdom, the proposed measures aim to emulate the success seen in regulating the energy market, where the mere presence of enforcement measures helped keep prices in check.
The impending policy announcement signifies a victory for the National Party, which has long advocated for such legislation. It also intensifies the political discourse surrounding living standards, contrasting with Prime Minister Anthony Albanese’s stance against break-up laws, likening them to outdated Soviet practices.
In a noteworthy display of discontent towards corporate influence, former minister Matt Canavan is poised to support a Greens bill advocating for the breakup of not only supermarkets but also banks and other corporate giants. Despite opposition within his own party, Canavan remains steadfast in his commitment to protecting small businesses and farmers from unethical corporate conduct.
Canavan’s sentiments echo those of a growing faction of influential Coalition backbenchers, including figures like Keith Pitt and Garth Hamilton, who are pressuring Dutton to uphold the Coalition’s purported dedication to working-class interests.
While major private sector lobby groups vehemently oppose divestiture laws, citing potential negative impacts on consumers, there is mounting momentum for regulatory intervention to address supermarkets’ market dominance. Amid accusations of price gouging during economic crises, executives have defended price increases, attributing them to rising production costs.
Gina Cass-Gottlieb, chair of the Australian Competition and Consumer Committee (ACCC), has expressed support for granting the Federal Court divestiture powers, indicating that such measures could potentially influence corporate behaviour.
However, both the National Farmers Federation and the Business Council of Australia oppose forced break-up laws, citing concerns about disruption to supply chains and economies of scale.
While Woolworths declined to comment, a spokesperson for Coles referred to the Australian Retailers Association’s position, emphasising the potential disruptions to established supply chains and economies of scale resulting from forced divestment.
In conclusion, the proposed “big stick” law represents a significant step towards ensuring fair competition and consumer empowerment in the retail sector. As political tensions rise and economic concerns persist, the debate surrounding the role of government intervention in regulating corporate power is poised to intensify.
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