Blog: Concerns over Australia's two-horse retail race

Sam Webb | 2 November 2011

On the day Woolworths Ltd announced wide-reaching plans to claw back sales from rival Coles, Australian Industry Minister Kim Carr voiced fears over the power of the two supermarket chains.

At a seminar organised by the Australian Food and Grocery Council (AFGC) - more from them later - Carr expressed concerns about the power of the pair, which together control 80% of retail food sales in the country.

"On the basis of the claims put to me, there is a case to be concerned about an abuse of market power," he told the seminar.

Carr also backed Rod Sims, the recently-appointed chairman of the Australian Competition and Consumer Commission, who last month warned supermarkets that he will keep an eye on their "significant market power" that stops smaller suppliers from negotiating supply arrangements.

"I welcomed his declared intention to fully explore the limits of ACCC powers in relation to these matters," the minister said.

Meanwhile, the AFGC also echoed concerns about, among other factors, the purchasing power of supermarkets on the Australian food manufacturing industry with the release of a report that claimed 130,000 jobs could be lost by 2020 if radical reforms are not made.

Woolworths clearly feels it has to improve in the face of competition from Coles. However, the rest of Australia's food sector remains concerned over just how much competition there really is in the industry.


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