Senate inquiry recommends powers to break up supermarkets
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The news: A senate inquiry into supermarket prices has recommended powers to break up major retailers, after an investigation into supermarket pricing practices.
The context: The Greens-chaired inquiry made 14 recommendations, including the creation of divestiture laws to break up supermarkets that abuse their market power.
In its final report, the committee found that “a clear majority of inquiry participants advised that divestiture powers would be an important ‘final step’ in competition regulation, to be drawn upon when all else fails”.
However, within the report, Labor senators said they did not support the committee's recommendation around supermarket-specific divestiture powers. They noted that many witnesses told the committee that these powers could lead to "unintended consequences that have the potential to make Australian consumers and farmers worse off".
The recommendations also included calls to make price gouging illegal, bolster the powers of the Australian Competition and Consumer Commission (ACCC) to investigate unfair trading, and establish a prices and competition commission to examine and monitor prices.
The committee also recommended that Treasury make the Food and Grocery Code of Conduct mandatory by 30 September, including "substantial penalties for breaches".
The source: Select Committee on Supermarket Prices report
