This COVID crisis has shown why we need fit for purpose competition policy and a properly resourced ACCC to police it.
The early lack of essentials such as hand sanitiser, masks and other PPE, along with the panic buying of certain goods and medicines, showed we need to be better prepared. In spite of these initial hiccups, so far, we have done very well and that is because our competition policy has helped create a community better prepared than it might have been.
Competition policy should highlight which are the industries and sectors that must be viable so that in the worst of times they are functional, diverse and able to provide the support, the goods and the services we need. These industries should not be protected (protection creates laziness and kills innovation) but they should be supported so that they are in existence when we need them.
Competition policy must also be about having our own (sovereign) capacity as a nation to provide health assistance through readily available medicine, PPE and health equipment and services.
Imagine, if you will, that we had no effective competition policy and as a result the retail market was dominated by two or maybe three companies? Imagine that shopping centre developers were allowed free reign to develop mega complexes.
The biggest retailers would have forced all the smaller players out of the market by using their unfettered market power. Besides the fact that prices would rise it also means there would be less choice.
As a result, when COVID hit and we were locked down we would have had a lot fewer places to shop.
Instead of being able to go to nearby smaller shopping centres for groceries, food and medical supplies, people would have been forced into mega shopping centres and as a result of larger crowds and longer lines, there would have been greater chance of spreading the virus. In these centres customers would have had to park in underground or in high rise car parks and walk a long way to get the one thing they needed.
We in COSBOA have argued for decades that the way the biggest shopping centres are created - by schmoozing with local government planners, having car parks removed from outside the mall and forced underground inside the mall, and having streets and bus stops realigned - creates local retail monopolies and removes choice for consumers, as well as forcing up prices.
Community based pharmacies would have been decimated as the biggest retailers took over pharmaceutical products. Hairdressers and butchers would have been forced into malls due to the unavailability of local retail premises. Medical centres and doctor’s premises would have been re-zoned out of the suburbs and into the malls.
We are not against shopping centres as there are many franchises in the centres run by small and family business folk, and many people enjoy visiting the centres at some time or another. We are against there being no choice for consumers but to visit a large shopping centre. The creation of local retail monopolies creates a situation where the biggest landlords can use their power to destroy businesses by unscrupulous use of leases and increasing rent by exorbitant amounts.
The pandemic has shown that competition policy must include consideration of the health of the Australian community and its ability to respond to crisis.
With COVID it is about people being able to keep separated as far as possible to stop the spread of the virus yet still be able to live their lives safely or even in lock down with access to services nearby.
Re-write competition policy to reflect the needs of the community, not of property developers and the biggest landlords. Re-write it to ensure that we always have access to essential health products and services. It’s about people, and the self-employed are people too.
This article by Peter Strong was originally published in the Australian Journal of Competition and Consumer Law (Volume 28 Part 4) in December 2020. Access the journal here.