With leading Australian supermarket operators Woolworths and Coles Myer both committed to continuing to expand their reach, an association of their independent rivals is staging a campaign to fight back.
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The National Association of Retail Grocers of Australia (NARGA) has submitted to the Dawson review of the Trade Practices Act no fewer than 25 recommendations aimed at restricting anti-competitive policies by the two leading multiples.
The 4000-member NARGA is demanding that the two chains be banned from making “creeping acquisitions”, a term it applies to describe the purchase, one by one, of independent operators, reports the Australian Financial Review. It also suggests a “divestiture remedy” to be applicable by legal authorities if market power is abused.
The association criticised the way that the two leaders were permitted to keep buying up existing supermarkets, slowly building up their market share further.
Ironically, what the group is demanding could mean that members who want to sell a supermarket could make less money, the Review points out. Melbourne supermarket business and property consultant Nick Barnett said Coles and Woolworths were paying up to double the rate paid by independent supermarket operators. “An independent will pay four, five or six times average weekly earnings; the chains will pay between eight and 12 times,” he said.
