Nationals push for $10m fines and ability to break up Coles and Woolworths if they abuse market power
David Littleproud has offered to help Labor bolster competition law protections for farmers and suppliers in a bid to prevent potential abuses of market power by Australia’s big supermarkets.
The Nationals leader proposes making the grocery code of conduct compulsory, boosting penalties to a “punitive” $10m maximum and adding powers to break up grocery giants in the event of misconduct.
In an interview marking one year of the Albanese government, Littleproud told the Guardian’s Australian Politics podcast that the Nationals are a “sovereign party” that will “do our own thing”.
Littleproud revealed he has had “initial talks” with the assistant minister for competition, Andrew Leigh, about competition law reforms that the Coalition “were moving to [in government] but were too slow”.
“The Nationals wanted to move at a lot quicker pace in terms of a compulsory grocery code. The current penalty on breaching the grocery code, which is voluntary for our big supermarkets, is about $64,000 … That’s a cost of doing business.
“Let’s have punitive penalties there, $10m plus divesture powers. I think if Woolies or Coles would lose … [alcohol retail business] Dan Murphy’s because they did the wrong thing by a farmer or by a small supplier, that they’d make sure they’re playing within the guidelines of fair and equitable trade.
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“Because this is the problem: they have 74% of the retail market. That is a market imbalance and even the [Australian Competition and Consumer Commission] say that.
On Friday, Coles’ supermarkets announced total group sales in the third quarter grew 6.5 per cent to $9.7 billion, with supermarket sales up 7.0 per cent to $8.6b and liquor sales rising 2.6 per cent to $801m.
Outgoing CEO Steven Cain attributed the success to Coles’ home brand range, Flybuys points program and weekly special deals.
Littleproud said the Nationals would like to work with the government to protect small business.
“So I think there’s some reforms there that the Nationals would like to work with the government, to say let’s shift the dial on this, let’s protect small business against big supermarkets.
“And it’s only regulatory. So if they’re doing the right thing, Coles, Woolies and Aldi shouldn’t care one iota.
“The small supplier and particularly farmers are getting done over and this is where they just need protection. They’re not asking for charity, they’re just asking for a fair price that’s transparent to their cost of production and what it is to get on on to … their shelves and on to your plate.”
On Friday the former competition watchdog head Rod Sims told Guardian Australia the big supermarkets have likely used their market power to increase prices higher than necessary during a cost-of-living crisis and that the government should consider reforming merger laws to limit their dominance.
Leigh said he “[welcomed] bipartisanship in this important area of competition policy” after a decade in which the Coalition presided over “the worst productivity growth in the postwar era”.
“As I’ve highlighted in a series of recent speeches, Australia’s economy has become increasingly dominated by a handful of big players,” he said.
“Since coming to office, Labor has increased penalties for anti-competitive conduct and banned unfair contract terms.
“We’re consulting on banning unfair trading practices and tackling anti-competitive behaviour in specific sectors. We’re also in the process of reviewing the effectiveness of the dispute resolution mechanisms under the grocery code of conduct.”
In a wide-ranging interview, Littleproud said at the 2022 election the Nationals had “lost a lot of voters, and particularly in the cohort of 18- to 54-year-old women and young people”.
Littleproud suggested the Nationals could re-engage with these voters by advocating for childcare accessibility, regional health, and committing that “we are serious about net zero and about how we achieve it”.
Littleproud echoed opposition leader Peter Dutton’s call for an investigation of small-scale modular nuclear power to help firm electricity from renewables, which the Albanese government has ruled out on cost and feasibility grounds.
Littleproud defended the Nationals’ decision to come out in November in opposition to the Indigenous voice to parliament in the constitution.
In contrast to Dutton’s claims that the voice proposal lacked detail, Littleproud said “the detail has been there for some time about the principle that the prime minister would be putting to the Australian people”.
Littleproud argued that Australia doesn’t “need a bigger bureaucracy, you just need a better one” to help narrow the gap between Indigenous and non-Indigenous Australians in health and social outcomes.
“The thing that I’m most disappointed in all this is that there is no ambitious goal to say, as a nation, that we will have closed the gap by 2030, 2035.”