The Times Australia
The Times World News

.

Coalition government would bring in divestiture power to deal with recalcitrant supermarkets

  • Written by Michelle Grattan, Professorial Fellow, University of Canberra

The Nationals have had a major win in having the opposition commit to divestiture legislation as a weapon of last resort against supermarkets guilty of uncompetitive behaviour.

Opposition leader Peter Dutton announced the policy at a joint press conference with Nationals leader David Littleproud, who enthusiastically backs the policy, and shadow treasurer, Angus Taylor who was anxious to stress the checks that would apply to it.

Earlier, at the Coalition parties meeting, there was strong debate about the radical move, which some Liberals oppose on the grounds it would represent excessive government intervention.

In his recent report to the government on supermarket competition, former Labor minister Craig Emerson recommended against divestiture.

He said forced divestiture could have the perverse effect of leading to greater market concentration rather than reducing concentration. He quoted the National Farmers’ Federation which said forced divestiture was not its policy.

Littleproud said the opposition supported the government’s plan to make mandatory the current voluntary Food and Grocery Code of Conduct, which covers relations with suppliers, but wanted to see powers go further.

The Nationals leader pointed out the Chair of the Australian Competition and Consumer Commission, Gina Cass-Gottlieb, had said divestiture powers would be “a good tool to have in the toolbox”.

Former Commission chairman Allan Fels wrote in The Conversation[1] last month that Labor was the only political party not to support a divestiture power and said that might be because of pressure from the Shop, Distributive and Allied Employees Association.

While forcing supermarket chains to divest individual stores might not be practical, forcing them to divest arms such as petrol or liquor would be a potent threat, he argued.

Littleproud told the news conference the Coalition wanted a “range of penalties, scaling penalties, to change the culture, to make sure there is fairness and transparency from the farm gate to your plate”.

Taylor said it was a matter of getting the “balance right”.

There were “some important safeguards we’re building into this initiative that are crucial to ensure that the balance is right, and distinguish this from other proposals that have been running around,” he said.

The plan was based on section 46 of the Competition and Consumer Act, relating to the misuse of market power.

The opposition plan was confined to supermarkets and hardware retailers (notably Bunnings) and would only be applied where divestiture could lead to substantial improvement to competition, Taylor said.

A very real benefit would have to be proved that would help consumers, small businesses and farmers who supplied to the retailers.

A proposed divestiture would be required to pass a public interest test, showing there would not be job losses outweighing any of the benefits to consumers, farmers and small businesses.

It would need to go through a court. “It won’t be for politicians or regulators […] it’ll be for the courts to make those decisions,” Taylor said.

Greens spokesman Nick McKim said Labor was “now isolated as the only party allowing the big supermarket corporations to continue to misuse their market power and price-gouge Australian shoppers”.

The government will introduce its Future Made in Australia legislation on Wednesday.

In a statement Prime Minister Anthony Albanese and Treasurer Jim Chalmers say the legislation is “all about unlocking private sector investment to build a stronger, more diversified and more resilient economy powered by renewable energy that creates secure, well-paid jobs around the country”.

They say the legislation will embed a disciplined approach for government investments under the scheme to ensure they made the most of Australia’s net zero potential.

“This package does three main things. It will legislate our new National Interest Framework, introduce a robust sector assessment process, and outline the Community Benefit Principles that will apply to investment decisions,"the statement says.

The national interest framework defines criteria for identifying where the government should invest.

They should be fields in which Australia could have a comparative advantage or where economic security or resilience make it imperative to invest in domestic capability.

Treasury will be able to undertake analysis of the extent to which areas of the economy align with the framework, barriers to private investment in these areas and opportunities to address them.

The legislation also sets out Community Benefit Principles to be applied. Decision makers must have regard to how potential investments

  • promote safe, secure and well paid jobs

  • develop more skilled and inclusive workforces

  • engage collaboratively with and achieve positive outcomes for local communities

  • strengthen domestic industrial capabilities

  • demonstrate transparency and compliance in relation to the management of tax affairs, including benefits received under the scheme.

There will be a Future Made in Australia Innovation Fund to support emerging technologies in industries like green metals, clean energy manufacturing and low carbon liquid fuels.

References

  1. ^ The Conversation (theconversation.com)

Read more https://theconversation.com/coalition-government-would-bring-in-divestiture-power-to-deal-with-recalcitrant-supermarkets-233788

Times Magazine

Building an AI-First Culture in Your Company

AI isn't just something to think about anymore - it's becoming part of how we live and work, whether we like it or not. At the office, it definitely helps us move faster. But here's the thing: just using tools like ChatGPT or plugging AI into your wo...

Data Management Isn't Just About Tech—Here’s Why It’s a Human Problem Too

Photo by Kevin Kuby Manuel O. Diaz Jr.We live in a world drowning in data. Every click, swipe, medical scan, and financial transaction generates information, so much that managing it all has become one of the biggest challenges of our digital age. Bu...

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

The Times Features

Ricoh Launches IM C401F A4 Colour MFP to Boost Speed and Security in Hybrid Workplaces

Ricoh, a leading provider of smart workplace technology, today launched the RICOH IM C401F, an enterprise-grade A4 colour desktop multifunction printer (MFP) designed for Austral...

Why Diversification Still Matters in a Volatile Economy

Market volatility, geopolitical conflicts, inflation fears—these are only some of the wild cards that render the current financial environment a tightrope to walk. Amidst all thi...

Specialised nutrition gains momentum in supporting those living with early Alzheimer's disease

With high public interest in Alzheimer’s disease, there is growing awareness of the important role nutrition plays in supporting memory and cognitive function in people diagnosed...

From clinics to comfort: how sleep retreats are redefining care in Australia

Australia is amid a sleep health crisis. Nearly 40% of adults report inadequate sleep, and the consequences are far-reaching, impacting everything from cardiovascular health to...

Is our mental health determined by where we live – or is it the other way round? New research sheds more light

Ever felt like where you live is having an impact on your mental health? Turns out, you’re not imagining things. Our new analysis[1] of eight years of data from the New Zeal...

Going Off the Beaten Path? Here's How to Power Up Without the Grid

There’s something incredibly freeing about heading off the beaten path. No traffic, no crowded campsites, no glowing screens in every direction — just you, the landscape, and the...