Big business launches fear campaign against TPA changes

A big business outcry against stronger competition law protections for SMEs won by Senator Barnaby Joyce yesterday is little more than scaremongering, SME business groups say.

Joyce revealed yesterday that Treasurer Peter Costello had agreed to include a provision likely to make it easier for the Australian Competition and Consumer Commission to take legal action against predatory pricing in a Government package of amendments to the Trade Practices Act.

National Association of Retail Grocers of Australia chief executive Ken Henrick says the inclusion of the Joyce amendment on predatory pricing is a win for SMEs.

The amendment will make it easier to prove that a business that holds a substantial share of a market has used its market power to engage in predatory pricing.

“This is a core issue, particularly in the grocery sector. We’ve got Coles and Woolworths with 80% of the market between them. It is the most concentrated market in the world and gives them immense power,” Henrick says.

He is dismissive of criticism by groups such as the Business Council of Australia and the Australian National Retailers Association, which represents the big retail chains, that Joyce’s amendment will protect SMEs at the expense of increased prices for consumers.

“I think that’s nonsense, have a look at Woolworths record profits and tell me why they would need to push up prices – it’s really just scaremongering.”

Council of Small Business of Australia chief executive Tony Steven says the effect of the amendment will be to create more of a level playing field for SMEs.

“We are disappointed that big business is seeking to protect themselves from competition from the small business sector,” Steven says. “This change will allow real competition in the market place and enable small businesses to compete effectively against vertically integrated multinational companies.”

Australian National Retailers Association chief executive Margy Osmond, who represents Coles and Woolworths among other big retailers, says big retailers could stop price discounting if the Joyce change is made law.

“Politicians considering these amendments need to answer the question of how they intend to protect the ability of retailers to offer shoppers genuine bargains without the prospect of prosecution,” Osmond says.