Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

Family First is introducing the Trade Practices (Creeping Acquisitions) Amendment Bill 2007 to stop big business from acquiring shares or other companies, through buyouts or takeovers, when it has the result of substantially reducing competition.

The problem of “creeping acquisitions” is a significant one for small business and the Trade Practices Act has to be strengthened to deal with it.

Creeping acquisitions refers to where a big company acquires shares, assets or other businesses over a period of time, which results in high levels of market concentration to the detriment of fair competition.

On its own, each acquisition might appear insignificant, but combined, over a period of time, they could create significant changes in a market.

For example, 30 years ago Coles and Woolworths controlled about 35 per cent of the grocery market.

Over the following decades, and due to a series of small acquisitions, more and more Coles and Woolworths stores sprang up, and today, they control a thumping 80 per cent of the market.

It is very difficult for the Australian Competition and Consumer Commission (ACCC) to declare that a small purchase, on its own, leads to a substantial reduction in competition,

But the combined effect of these so-called creeping acquisitions, over time, can result in a substantial reduction in competition.

Less competition in any market is not good. Fair competition is vital as it keeps prices as low as possible for Australian families.

The Trade Practices Act does not adequately deal with this issue, and that is why Family First is introducing legislation to outlaw creeping acquisitions over a six-year period, that have the effect, or likely effect, of substantially reducing competition.

It is a serious concern that the Trade Practices Act does not give adequate powers to the ACCC to be able to prevent a series of acquisitions by considering the combined effect of those acquisitions on competition.

The Act must be strengthened so the ACCC has the powers to be able to prevent creeping acquisitions which substantially reduce competition in a market. This was a recommendation of the Senate Committee that examined the Trade Practices Act in 2004 and must be implemented.

The Senate Economics Committee report “Effectiveness of the Trade Practices Act 1974 in protecting small business” recommended that creeping acquisitions be addressed to stop the further concentration of markets, but the Government’s bill passed this week failed to address this.

Former ACCC Chair Professor Allan Fels stated in the report:

When a big retailer, say, is going to buy a very large number of outlets at a given time, if they bunch them all together it is possible for us to look at them as a whole and say, ‘This could substantially lessen competition. ‘ But most often acquisitions are made in small parcels or one at a time, so each case as you look at it does not seem to amount to a substantial lessening of competition. It has to be a substantial lessening of competition in a market.

I commend this bill to the Senate.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.