The limiting of discounts from Shopper Dockets to 4 cents is a win for competition.
The duopoly are on notice that there is now a competition regulator with expertise, check depth of knowledge, stuff a long term strategy, sovaldi an understanding of what competition means and finally with gumption.
In parallel with this reborn ACCC there is also a government that has people (looking at you Bruce Billson) who also understand what true competition is and how to achieve it. Behind the ACCC and the government is a group of industry associations who also know that we have to continue to fight for true competition and for fairness for the person who has taken a risk and has employed other people and who is the backbone, the heart and the imagination of the economy.
It wasn’t that long ago, before the current Chairman, that the ACCC would go to water when confronted with any issue to do with competition and Coles and Woolworths. There was a considerable fear of failing in court. There was reason for this as the duopoly had a large wiggery of barristers sitting waiting for a chance to make a lot of money by taking on the government. No government agency will ever have enough barristers or funds to match the bottomless pit of silks that the duopoly can access. So for the ACCC to win it must be right and there must be no doubt of their rightness and previously the ACCC just ran away and hid as it was more afraid of losing a court case than fighting the good battle.
So it seems that the new Chairman has taken a different approach. Rather than fight from afar and hide away from conflict the ACCC has been in deep dialogue with the duopoly. It seems they have shown Wesfarmers and Woolworths what is good and bad, what is right and wrong and why they, the ACCC, would win a court case. It appears that the duopoly understood they would lose and an agreement was reached that still gives them an opportunity to give discounts to customers but stops cross subsidization which is a process that was truly killing competition. In parallel with this we industry representatives have been aggressive in highlighting the problems caused by domination and in particular by the bizarre and belligerent use of shopper dockets to kill off competition and, in the long term, cause prices to rise.
There is more change needed and hopefully more to come. This domination by a few is putting the long term health of our economy at risk. A healthy economy is one that can innovate and change, one where new processes, products and markets can be developed with reward for effort. When two companies dominate like these two then innovation is ignored, products are decided by the seller not by the manufacturer or the consumer and new markets are unable to develop.
Maybe our friends in the Duopoly have come to understand that with dominance comes responsibility? In the long term if the duopoly is allowed to continue with its behaviour our standard of living will drop and that can’t be good for its shareholders? Our standard of living WILL drop if the suppliers are not allowed to innovate, to experiment and to get reward for effort.
Bring on the changes and Merry Xmas to the ACCC. I may even send a card this year.
Peter Strong Executive Director