Well said, Dianavan!


This is the Australian situation at present :

" ... Anti-Competitive Conduct and Pricing :-

Alan McKenzie, spokesperson for the National Association of Retail Grocers of Australia (NARGA), was interviewed by Stephen Long on ABC Radio on 26 August 2003. He said that Woolworths and Coles Myer have the highest grocery retail market concentration in the world, approaching an unparalleled 80%; their control of petrol is about 30%, and liquor is 30­-40% of the market. In the UK, the three biggest supermarkets control less than 50% of the market; in the US, the top three control less than 25%. Nowhere else in the world do they have 30% of the petrol market. Some critics say that these lower prices won't be sustained once they squeeze suppliers' margins and force competitors out of business.


NARGA issued a media release on 17 December 2003 that announced how a recent High Court decision has dealt a fatal blow to the misuse of market power provision (section 46) of the Trade Practices Act.

Mr McKenzie writes: ""There can be no doubt that the latest decision confirms that the High Court has taken an unduly narrow view of section 46, a view that does not do justice to the parliamentary intention behind the provision.""

He goes on to state: ""Effective laws deterring abuses of market power are critical to the promotion of competition for the benefit of consumers. Unless the abuse of market power is prevented, efficient smaller players can be destroyed by larger and more powerful players with their deeper pockets and every interest in protecting any inefficient practices.""

He concludes: ""Given that a firm could engage in the same below-cost pricing or other potentially anti-competitive conduct, with or without market power, it is clear that in the High Court's interpretation of the key concept of taking advantage, there are few, if any, types of conduct that will be caught by s46, simply because such conduct can be engaged in by firms with or without market power.

Section 46 of the Trade Practices Act allows a company to fix prices below cost in order to eliminate competitors if that company does not have substantial market power.

Woolworths spent over $10 million fighting the Australian Competition and Consumer Commission (ACCC) in a Victorian Court over price fixing and misuse of power. One of its Safeway stores had stopped Tip Top bakeries from selling factory seconds and discounts at a stall at Preston Markets. Supermarket suppliers dropped Tip Top until small retailers ceased discounting. Woolworths CEO Roger Corbett commented: ""We don't deliberately undercut our small competitors."" If this case goes to the High Court, it will probably be overturned because they will be able to say that Safeway did not have substantial market power.

Federal Labor has said that it will amend the Trade Practices Act to prohibit predatory pricing. It highlighted the recent High Court rulings as weaknesses of the Act in dealing with predatory pricing, and cited section 50 of the Canadian Competition Act as one approach worth considering. This ruling prohibits firms from ""selling products at unreasonably low prices, having the effect or tendency of substantially lessening competition or eliminating a competitor, or designed to have that effect"". The Australian Democrats have been advocating amending the Trade Practices Act for quite a while now and are delighted that Labor sees the virtue of this policy position ... "

From Maple Street Co-op News,
February/March 2004
"We Won't Shop There - or There!"
by Lori Sturtz


and there's LOTS, LOTS more ...


Cheers! R-J