House debates

Wednesday, 28 February 2024

Matters of Public Importance

Grocery Prices

3:39 pm

Photo of Daniel MulinoDaniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

This is an incredibly important issue, and I do give credit to the member for Kennedy for raising this. I want to start by making the observation that I think it's fair to say that all speakers in this debate would agree that market concentration in supermarkets is a problem. Also I would suggest that market concentration in a number of sectors in our economy is a problem. What we need to put in place in this building, in this chamber and the other chamber, over time, are a series of measures that deal with competition at both the economywide level and also the sector-specific level. I'm going to comment on both of those in the course of this contribution.

Can I also make the observation that I think everybody who is going to speak in this debate would have spoken to constituents and would have spoken to people in their everyday lives who are struggling with prices in supermarkets and also with prices in other areas of their lives. So this is clearly something which is touching people right throughout our community.

I speak on this issue as a member who shares their concerns and also as the chair of the House economics committee. I want to share with this chamber the fact that that committee will very soon complete an inquiry into competition, which has been conducted over more than a year. To follow-up on some of the points made by the minister earlier in this matter of public importance debate, the committee has received a significant amount of evidence about economywide issues with competition in retail and supermarkets and also more broadly. That includes the fact that market concentration is high in many sectors but also that over the last five, 10, 20 years in many sectors and on average across the economy it has worsened. That is something the member for Kennedy referred to in relation to supermarkets, and I just want to make the observation that this is something which is occurring across a number of sectors.

The other point I think is that mark-ups in a number of sectors are increasing, and also firm entry and exit is worsening—in particular, in a dynamic sense, the growth of small new-entrant firms relative to the growth of more established firms is worsening.

When a lot of empiricists, when a lot of people who look at competition both from an empirical or a data perspective and from a theoretical perspective look at this, they try and use all of these measures because no one single measure captures the level of competition or dynamism or consumer outcomes in a market. What my committee received evidence on was that on all of these measures across the economy as a whole and in a number of key sectors things are getting worse. I want to put that into this debate to reinforce the fact that this is an important issue in retail and more generally across our economy.

That's why I want to start with a couple of economywide measures that the government has undertaken, including increased penalties for anticompetitive conduct and banning unfair contract terms. That won't solve all of these issues. There are some deep systemic issues in our economy, but these are important steps. So some action has already been taken at that economywide level.

I also want to point to the fact that my committee received a significant amount of evidence in relation to mergers. The Treasurer's competition task force, which was set up six to nine months ago, has already issued a very significant options paper on mergers. So this is an area that is already receiving significant attention, after having not been looked at for well over a decade—probably two decades. Again, this is a systemic economywide issue that is already receiving significant attention.

We have already heard that Craig Emerson is looking at the food and grocery code, but I think it's also worth mentioning that before that there was already completed an inquiry into the food and grocery code of conduct dispute resolution processes, which of course are so important. The committee work that was completed by the House economics committee received evidence from agricultural producers, upstream producers, about a lot of the difficulties of negotiating with the supermarket sector given market power. The government has already accepted the recommendations arising from that.

There are important reviews underway by the ACCC, by CHOICE, by Craig Emerson, but there are also areas where action has been taken. These are systemic issues that can't be solved in a very short period of time. The government is very conscious of how important they are, and it will build on actions taken to date, with further actions over the course of this parliament.


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