This report of the Committee is a good body of work with sensible and
pragmatic recommendations flowing from it. The Committee and the Secretariat
are to be commended for their work.
Whilst broadly supporting the recommendations of the report, I do not
think the Committee has properly captured the devastating effect of Coles and
Woolworth's $1 per litre milk price war and the impact it has had on so many in
the dairy sector. In the context of a tough world market this loss leader
campaign has thrown a spear into the heart of so many dairy farmers.
There can be no mistake that $1 per litre milk creates a misleading
perception as to the value of milk. Under this supermarket concocted regime the
retail cost of bottled milk per litre is less than the retail cost of bottled
water, and that just isn’t right.
There is no question that the enormous market power of Coles and
Woolworths, which, combined, control approximately 80 per cent of Australia's
dry packaged grocery market, has allowed them to engage in pricing, procurement
and marketing behaviour that significantly disadvantages smaller retailers and,
in particular, farmers and processors.
The effects test changes to competition laws are welcomed but it needs
to be followed up with effective access to justice provisions and divesture
laws as a last resort remedy in abuse of market power cases.
In this regard, I also attach the additional comments that I and other
Senators made in the 2011 Senate Economics References Committee inquiry into
the The impacts of supermarket price decisions on the dairy industry, an
inquiry that I instigated, and I do not resile from those. I ask that these
comments also be taken in consideration in the context of this inquiry.
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