The Australian government plans to open its doors to more foreign investment into the grocery industry.
The reform builds on the current inquiry being conducted by the Australian Competition and Consumer Commission (ACCC) into the grocery sector supply chain.
Last month, independent retailers reiterated claims that the dominance of Australia’s two largest food chains, Woolworths and Coles, is restricting competition and pushing up prices.
With its reforms, the Australian government is targeting foreign supermarket chains like Aldi, who will be able to set up in the country more easily and boost competition in the grocery industry.
The plans will change foreign investment rules to extend the time-frame for the development of vacant commercial land from 12 months to five years.
Assistant Treasurer Chris Bowen said the current time limit on foreign investors is discouraging new competitors from entering the market.
He added that the restriction is also preventing existing competitors from expanding because they cannot secure forward purchases of land in growth areas.
“This reform creates a more level playing field, and pulls down the barriers to entry to foster competition,” Bowen said.
“The change recognises the reality facing commercial land purchasers that 12 months is simply not enough time for completing all the statutory and commercial processes required to enable development to commence.”
However, the plans have drawn criticism from local retailers and economists who argue it will make little difference to the cost of groceries at the checkout.
Many are suggesting the leaked plan could be an attempt to divert attention from soaring inflation figures.
Speaking to The Australian, John Cummings, chairman of the National Association of Retail Grocers of Australia, reiterated that the proposal would make no difference to grocery prices.
“For an international player to get into the Australian market and compete with Coles and Woolworths, they would need to find 750 supermarket sites around Australia, and that just simply is not going to happen.”