Supermarket giant, Woolworths, wants the Federal Government to loosen regulations it says are disadvantaging customers and making it harder for retailers to compete with international rivals.
Woolworths CEO, Grant O’Brien, says competition laws and regulations are inadequate given changes in the past 20 years, including online shopping and the arrival of the likes of German chain, Aldi, and the US giant, Costco.
He called on the government to get behind some of the expected recommendations of Professor Ian Harper’s review of competition policy, due to be handed down in 2015.
“I look forward to the government delivering the environment for the next wave of microeconomic change and reform,” he told a business lunch in Sydney.
“For us retailers it must be delivered so that we are free to compete in what is now a global market to better serve our customers.”
Professor Harper’s interim report recommended trading hour restrictions be abolished, and called for an overhaul of regulations on the ownership of pharmacies.
Current laws require pharmacies to be owned by qualified pharmacists and restrict where they operate.
But O’Brien objected to a so called “effects test” suggested by Professor Harper, which would prohibit large businesses from acting in a way that would hurt smaller competitors and, ultimately, reduce competition.
He said no one knew how the proposed test would work in practice and it could hurt investment and consumers.
“For example, if we are able to develop substantial cost savings in our supply chain are we able to pass those on to consumers, or should I have regard for the impact that might have on competitors?
“My point is that there is not clarity on how these changes might work in practice, and to date that is the case, it automatically follows that it will create uncertainty for business.”
Despite concerns about a duopoly between Coles and Woolworths, competition among supermarkets had been strong in the past five years and delivered benefits for consumers, he said.
“Over the past five years the cost of the standard basket of groceries has grown at only half the rate of inflation,” O’Brien said.
“We calculate that this has delivered about $450 to every household for each of those years.”
AAP
