Woolies, Coles slammed by ACCC but spared split call

Good morning. Here's what happened overnight and what you need to know today.

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1.

Super oligopoly: The ACCC’s year-long inquiry found Woolworths and Coles wield too much power and fit the definition of an oligopoly but stopped short of recommending divestiture. According to media reports, the inquiry found they have entrenched dominance, little incentive to compete on price and are among the world’s most profitable supermarkets, with rising margins since the pandemic. Released weeks before a federal election focused on the cost-of-living crisis, the 441-page report made 20 recommendations to improve competition, including mandatory online price publishing, clearer pricing practices, and stronger supplier protections. Grocery prices have risen 24% in five years, with eggs up 47% and milk 34%. The government will allocate $2.9 million over three years to support suppliers, on top of a $30 million ACCC funding boost last year. Treasurer Jim Chalmers backed the recommendations, highlighting the report does not support breaking up the chains. “This is about ensuring Australians aren’t treated like mugs,” he said. (Capital Brief)(ABC)(AFR)(The Australian)

2.

Rates watch: The Bank of England held interest rates at 4.5%, warning of deep uncertainty over the British and global economies largely due to rising trade tensions triggered by the US. Meanwhile, the ECB warned Europe must “stand ready for anything” as US tariffs threaten to weaken growth and push up inflation. Answering lawmakers’ questions on Trump administration policies in Brussels, ECB President Christine Lagarde said tariffs used as “a weapon” and “blackmail” reinforce the need for Europe “to be strong.” She dismissed speculation of a “Mar-a-Lago accord” to devalue the US dollar. The ECB estimates unilateral US tariffs would reduce eurozone growth by 0.3 percentage points in the first year, or by 0.5 points if the EU retaliates, while inflation could rise by 0.5 points. In a social media post Donald Trump said the Fed, which left rates unchanged yesterday, would be “much better off cutting rates as US tariffs start to transition.” Elsewhere, the Swiss National Bank cut its key rate by 0.25 percentage points to 0.25%, citing “significantly” increased global uncertainty. (BoE)(Bloomberg)(Capital Brief)(SNB)

3.

Labor promises: Treasury announced plans for cryptocurrency regulation, the strongest commitment yet from the Albanese government to establish industry rules. The plan’s four priorities include frameworks for crypto exchanges and stablecoins, a review of financial services trials without ASIC licensing, and initiatives to “safely unlock” digital asset technology’s benefits. Separately, PM Anthony Albanese said Australia’s role in a potential military force in Ukraine would likely be limited to ADF personnel assisting with training and planning. He confirmed the government is open to requests to contribute to a peacekeeping force, which could involve up to 30,000 personnel from European nations and allies like Australia. It comes amid a growing divide between Albanese and Dutton, who opposes sending Australian personnel. (Capital Brief) (Capital Brief)

4.

AI IPO: AI provider CoreWeave said it is targeting a valuation of up to USD26 billion ($41.4 billion) in its US initial public offering. A regulatory filing shows the Nvidia-backed company is marketing the company shares for USD47-$55 per share, and plans to sell around 47 million shares while existing stockholders are offering the remaining 1.8 million. At the top of the share price range, CoreWeave would have a market valuation of USD26 billion. The target valuation is a lower figure than the USD4 billion investors and bankers had reportedly sought to raise, in the hopes of achieving a USD35 billion valuation. Earlier this month, the FT reported that one of CoreWeave’s two key customers, Microsoft, is walking away from certain agreements it had made with the cloud computing provider over delivery issues and missed deadlines. Deals with Microsoft amounted to 62% of CoreWeave’s total 2024 revenues. (CoreWeave SEC filing)(Bloomberg)(Capital Brief)

5.

America first: Nvidia CEO Jensen Huang plans to spend hundreds of billions of dollars on US-made chips and electronics over the next four years, shifting the company’s supply chain from Asia amid Donald Trump’s tariff policies. Nvidia can now manufacture its latest AI systems in the US through suppliers like TSMC and Foxconn, with production already underway at TSMC’s Arizona factory. “We will procure… probably half a trillion dollars’ worth of electronics in total… [with] several hundred billion of it [manufactured] here in the US,” Huang told the Financial Times. At Nvidia’s developer conference, Huang announced a quantum computing research lab in Boston with Harvard and MIT. He also addressed previous comments suggesting useful quantum computing was decades away, which had triggered stock declines. Huang admitted he had not realised some quantum companies were publicly traded. (FT)(Capital Brief)

6.

Swiss exit: UBS Group AG is examining a potential headquarters relocation if Switzerland proceeds with a requirement for the bank to hold an extra USD25 billion in capital, Bloomberg reported citing unnamed sources. Based on internal calculations, UBS executives believe the requirement could push its key capital ratio from around 14% to about 20% in the harshest scenario, making the bank uncompetitive relative to global rivals and leading to shareholder pressure. The Swiss government and regulators argue the measure is necessary to prevent another crisis like Credit Suisse’s 2023 collapse. A draft proposal is set to go before lawmakers in May, though implementation would likely not occur before 2028. UBS is stepping up lobbying efforts but declined to comment beyond previous remarks by CEO Sergio Ermotti, who said in January that moving was “not a topic” for him at that stage. UBS shares rose after the news. (Bloomberg)

7.

Media wars: Tech giants including Meta, X, Google, Apple and Amazon have lodged a formal complaint to the US Trade Representative calling on the Trump administration to target Australia’s “coercive and discriminatory” media laws. The Computer and Communications Industry Association (CCIA) is one of hundreds of US companies that have filed submissions to the agency acting on Trump’s America First Trade Policy, and calls out Australia’s News Media Bargaining Incentive, saying that the incentive is a “key example” of discriminatory taxation of digital products and services toward US companies. The CCIA writes: “Australia’s extraction and redistribution of revenue from U.S. digital suppliers to local news businesses is reported to have cost US firms USD140 million annually”. The submission also criticises Australia’s proposed approach to regulating Australian video content and the high risk of Australia’s incoming general-purpose AI models. Rather than calling for tariffs, the CCIA calls for the “removal of the barriers.”(Capital Brief)(Sydney Morning Herald)

8.

Slow deal: Nine Entertainment bankers are in talks to sell its controlling stake in Domain to CoStar, according to the Nine-owned Australian Financial Review. Nasdaq-listed CoStar first tabled its $4.20 per share offer to the Domain board on 20 February after securing a 16.9% stake following an after-hours sharemarket raid. Sources told the AFR that bankers for both companies are now negotiating prices for Nine’s remaining 60% stake in Domain, with Nine bankers willing to accept an offer at $4.65 per share. The price would value Nine’s stake in Domain at $1.76 billion, a 49% premium to what Domain’s stock was trading at before the CoStar offer. Nine’s slow response to the initial offer has surprised onlookers, particularly after Nine's CEO Matt Stanton met with CoStar founder and chief executive Andy Florance when he visited Sydney in 2024. (AFR)(Capital Brief)