ACCC grocery report to call for big changes

Tighter rules on creeping acquisitions and mandatory unit pricing are among the major reforms rumoured to be part of a new report into the grocery industry by the competition regulator.

Tighter rules on creeping acquisitions and mandatory unit pricing are among the major reforms rumoured to be part of a new report into the grocery industry by the competition regulator.

The Australian Competition and Consumer Commission will today provide its report on the competitiveness of the grocery sector to Competition and Consumer Affairs Minister Chris Bowen.

The Government is unlikely to make the report public until it has formulated its response, but speculation is already mounting that it could recommend a big shake-up of the industry.

According to newspaper reports, the ACCC will call for tougher creeping acquisition laws to limit the ability of large retailers to buy new supermarkets where doing so will diminish competition.

The independent grocery sector has long called for a clamp down on creeping acquisitions, although some have argued the problem lies less with the laws than their prosecution by the ACCC.

The exposure of the big supermarket chains to competition could be further enhanced if a rumoured report recommendation to ban lease conditions preventing direct competitors from opening in the same shopping centre is adopted.

The report is also thought to propose an online “grocery watch” service to inform consumers on prices in different supermarkets, similar to the FuelWatch idea backed by the Government.

Independent grocers may be concerned about a third big policy shift thought to be contained in the report; mandatory unit pricing.

Unit pricing requires supermarkets to inform consumers of the per-unit price of a good (per example, per 100g or 1kg) as well as its label price. It is supported by consumer advocates because it is thought to improve the ability of shoppers to compare the value of different products.

But independent grocers fear that unit pricing scheme would be expensive for them to administer and put them at a disadvantage to larger and better resourced major supermarkets.

Master Grocers Association legal counsel Marie Brown says her organisation opposes the introduction of a mandatory unit pricing scheme.

“Most of our independents are fairly small and we think it will be a tremendous imposition – a lot more work, a lot of red tape and an expensive exercise for retailers,” Brown says.

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