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04 December 2019

Small grocer collective bargaining proposal a game-changer: Ombudsman

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell says small supermarkets should be able to engage in collective bargaining to remain competitive and viable.

The Ombudsman has written to the Australian Competition and Consumer Commission (ACCC) in support of a proposal by Co-Operative Supermarkets Australia, to participate in collective bargaining to help small businesses compete with the major supermarkets.

“Australia’s supermarket industry is in the midst of a long-running price war and that’s hurting small businesses,” Ms Carnell says.

“It’s nearly impossible for smaller players, with limited market share and purchasing power, to compete.

“The industry is dominated by Woolworths Group (34%), Coles Group (27%) and Aldi (11%) collectively owning more than 70% of the market share.

“While other multinationals such as Costco, Kaufland and Amazon may dilute market concentration, Coles and Woolworths will likely continue to drop prices to remain competitive.

“My office has been assisting a number of small businesses that have been subjected to predatory tactics used by large supermarket operators to financially squeeze their small suppliers.

“Collective bargaining is a game-changer for small supermarkets and businesses in the grocery supply chain because it strengthens their purchasing power.

“It would also contribute significantly to supply chain diversification, allowing small and medium manufacturers and growers to explore new markets while also promoting their sustainability and growth in domestic production, particularly in regional Australia.    

“This initiative will help keep local shopping centres viable. If the supermarket closes, the whole shopping centre is likely to go as well.”