Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to offer my congratulations and support to the new ACCC Chairman, Mr Sims, on some of the comments he has made which have been a refreshing change from the last 10 years of the ACCC. Mr Sims recently made some comments on bullying of suppliers and also the anticompetitive effects of shopper dockets.

As to the bullying of suppliers, Mr Sims appeared before one of our Senate estimates committees several weeks ago and gave some evidence which has been described as a watershed moment as far as the ACCC's inquiries go. Previously, suppliers to our supermarket duopoly had been frightened to give evidence to the ACCC, but Mr Sims gave an offer of complete confidentiality to any supplier who came forward and 50 suppliers trusted Mr Sims's word. They came forward and made comment, and they advised Mr Sims of conduct which would be either unconscionable conduct or misuse of market power if proved before a court. Mr Sims told the Senate estimates committee that such conduct included: (1) persistent demands for additional payments from suppliers, above and beyond that negotiated in their trade terms; (2) the imposition on suppliers of penalties that did not form part of any negotiated terms of trade and which apparently did not relate to any actual costs incurred by the supermarket chains; (3) threats to remove products from supermarket shelves or otherwise disadvantage suppliers if claims for extra payments or penalties were not paid; (4) failure to pay prices agreed with suppliers; and (5) conduct that discriminates in favour of the supermarkets' home brand products.

In addition, Mr Sims has made some very welcome comments on shopper dockets, which I would like to quote. He said:

If the supermarkets want to discount their products to get people in the door that’s fine, lower the price of the goods in the supermarket.

However, he says what the supermarkets are doing is:

… taking the supermarket profits and lowering the price of their petrol when they are competing with other people.

So we’re not against discounts, but when you take your profits from one sector and have massive discounts in another sector, then it does have an effect on the competitive process and that’s what we’re here to protect.

Hear, hear, Mr Sims! Shopper dockets are anticompetitive. They are against the long-term interests of the consumer. There is simply no free lunch—someone has to pay for these discounts, and we all pay for them with higher grocery prices, and then we pay again through higher petrol prices as competition collapses and the independents are driven from the market.

Why is this important? It is important because Australian consumers have been paying, for years, some of the highest grocery and supermarket prices in the world. Even Wesfarmers' managing director has said:

Australian consumers for too long have worn higher and higher prices for food and groceries in this country.

And he is exactly right.

Just one example is the price of Vegemite. The information was published in News Limited papers several weeks ago that the price of Vegemite is actually 40 per cent higher here in Australia than it is in Britain. And remember: this is a product that is made here in Australia and shipped to the United Kingdom, with all the additional handling costs. Yet a consumer in the UK can walk into a supermarket and buy that for a price 40 per cent less than consumers here in Australia are paying. And that is not just an isolated example. You could look at Coke, Cadbury chocolate, Heinz tomato sauce or Kellogg's breakfast cereals—Australian consumers are paying prices 30 and 40 per cent higher than anywhere else in the world.

What can we do about this? We seriously have a problem. The government made a big song and dance of this before they were elected in 2007. And what did we get from this government? GroceryWatch, spin, stunts—a complete waste of taxpayers' money. At least the coalition has put forward a promise: a root-and-branch review of Australia's competition law. We need to have a look at it to see what we can do to improve competition.

In conclusion, we should look at Canadian competition law. The Canadian Competition Act has a special section which says:

The purpose of this Act is to … ensure that small and medium-sized enterprises have an equitable opportunity …

That is what we need here in Australia—equitable opportunity to compete. (Time expired)