The powers of the Australian competition watchdog have been strengthened to increase competition in the country’s grocery sector and curb the dominance of the two largest supermarkets, Woolworths Ltd and Coles.
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Australia’s Federal Government yesterday (22 January) announced amendments to the Trade Practices Act.
Under the new legislation, the Australian Competition and Consumer Commission (ACCC) will now have the ability to block “creeping acquisitions”, where large companies expand their market power by acquiring smaller rivals.
The move is designed to ensure the ACCC can reject acquisitions that would substantially lessen competition in any local, regional or national market, Australia’s Competition Minister, Dr Craig Emerson, said.
“The government is seeking to open opportunities for competition in grocery retailing by removing anti-competitive barriers to entry,” Dr Emerson revealed.
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By GlobalDataThe competition authorities has also confirmed that the ACCC can examine the acquisition of greenfield sites and not just existing businesses, Dr Emerson added.
“This will ensure the ACCC can review acquisitions by the major supermarket chains of interests in new sites to investigate whether such acquisitions could substantially lessen competition,” he said.
