Ahead of the federal election on 21 May, the Council of Small Business Organisations Australia is calling on the major parties to commit to meaningful competition policy reforms that would give the ACCC some teeth and allow it to better protect small businesses from being exploited by big businesses.
COSBOA is arguing that such reform is essential for Australian towns, neighbourhoods and communities to preserve what makes them unique – having a diverse mix of independent, local businesses.
COSBOA CEO Alexi Boyd said “As the election gets closer, the major parties are announcing their plans for small business, but neither have announced anything in their policy platforms regarding competition reform.”
“This is a major oversight. Australia’s current competition regulation doesn’t do enough to stop anti-competitive acquisitions or curtail market concentration, leaving small businesses vulnerable to being exploited by the duopoly of Coles and Woolworths, put out of business by big box retail chains like Bunnings and Officeworks, and bullied by big landlords like Westfield.”
“You know it’s bad when even the immediate past Chair of the Australian Competition and Consumer Commission (ACCC) has called for reform, saying that our voluntary merger control regime is skewed towards making clearance the default and not in line with international best practice. The new ACCC Chair, Gina Cass-Gottlieb, has indicated that this is on her radar as well.”
Ms Boyd continued “A particular danger we’re seeing at the moment is big businesses creeping in and trying to take advantage of the invisible supply chain, the parts of the supply chain we don’t see. They use aggressive tactics to acquire other businesses with the intention to dominate the market end-to-end – from logistics through to distribution through to shelf space – extending their control and influence to every part. An example is Woolworths’ acquisition of PFD foods, which the ACCC could do little to stop.”
Ms Boyd concluded “Reforming competition policy is crucial to ensure Australia remains a place where small businesses can grow and thrive – a place where people can bring their entrepreneurial ideas to life and be their own boss as an alternative to working under the CEO of a big, monopolistic company.”
“Having a mix of independently owned small businesses is what makes a town or a neighbourhood unique. Small businesses give a place community and culture. But without proper competition regulation in place, big businesses swoop in, copy/ pasting the same big box retail chains from one location to another. Let’s not let that happen.”
Some of COSBOA’s recommendations are:
-Implement overdue changes to unfair contract terms by ensuring the legislation is passed immediately upon parliament’s return
- Increase funding of the ACCC for more power to impose conditions on mergers that reduce anti-competitive impacts
- Update Section 50 of the ACCC Mergers Guidelines. The burden of proof should be on future scenarios in relation to market concentration, NOT proof of what has occurred in the past; review of the definition of the word ‘likely’ in the merger test
- Mandatory notification for all mergers over a certain threshold to the ACCC, rather than a voluntary system (so that Australia is in line with Europe and the USA).