Price gouging fines targeting Coles and Woolworths are necessary

Contributed from Victoria

The Albanese government’s decision to bring gin a law that imposes substantial fines on supermarkets guilty of price gouging is a good one. Australia supports in. When Coles and Woolworth’s who dominate the retails market practice price gouging, they hurt the public. In doing so, they violate our rights.

Between them. The duopoly controls 80 percent of the market, and this is the source of their power to take advantage. Dealing with this is an important leg, even if it isn’t the only one, in any attempt to dela with the rising cost of living crisis.

Under the new law, violations will attract a maximum of fine of $10 million, or 10 percent of the turnover of the preceding 12 months. This will apply to supermarkets with a higher turnover than $5 billion. It clearly marks the duopoly, alongside Aldi and Metcash, which owns IGA.

The government’s decision includes penalties against unfair treatment of suppliers in relation to supply agreements, and violation of obligations to train staff and keep proper records. Monopoly control has enabled the supermarkets to force suppliers to accept lower payments for produce because have nowhere else to go to and risk losing their agreements if they do not comply. Major breaches will attract a fine of up to $2 million and minor ones up to $178,800.

A mechanism to protect whistle blowers is to come into existence, although the detail of this has not been made public.

Although necessary, it remains that these measures on their own won’t stop the monopolistic behaviour that is behind price gouging and mistreatment of suppliers. This requires the existence of an adequate antimonopoly law and its enforcement. This should be raised down the track.

A more immediate hurdle is that the Albanese government’s plan won’t likely be supported by the Coalition opposition. Their leader Peter Dutton has already alleged that he calls the Emerson’s plan won’t work. He calls the review of Emerson’s review a “Mickey Mouse” effort.

The penalties could be stiffer for a duopoly that enjoys an annual turnover of more than $40 billion each. The proposed fines are not particularly stiff against this. Dutton’s declaration that the opposition is considering support for laws to break up monopolies could be a positive contribution. This is if it is genuine and after we see the detail.

The fact that it regards the Albanese fins as “too heavy handed” suggests that they are not serious about dealing with monopolies and are using a ploy to get some needed credibility.

Be the first to comment on "Price gouging fines targeting Coles and Woolworths are necessary"

Leave a comment

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.