Master Grocers Australia (MGA) claims a leaked copy of a letter from the Business Council of Australia (BCA) to cabinet ministers reveals a “campaign of bullying and extravagant claims”.
The document allegedly sent by the BCA to members of federal cabinet says the proposed changes to Section 46 of the Competition and Consumer Act “go too far and come at a very challenging time for the Australian economy”.
“They would impact the entire economy, not just large companies, as market power does not necessarily equate to business size,” the BCA states.
The document outlines examples of “ordinary behaviour by a business with market power” that might, according to the BCA, be abandoned or deterred if the proposed changes to Section 46 are made.
Among the claims are that the application of the effects test puts at risk manufacturing product innovation, established companies could be prevented from innovating in response to new entrants, and growth of cheaper groceries under home brands could be stopped.
“I strongly urge cabinet to reject any proposals to introduce changes to Section 46, as proposed by the Harper review,” says the document, which is signed by BCA President Catherine Livingstone.
“At the very least, I ask you to require a separate and independent assessment of risks and the full set of economic costs and benefits of the proposal. If a regulatory impact statement is presented to cabinet that bundles Section 46 changes with other proposals from the Harper review, and only narrowly assesses compliance costs, it will be manifestly inadequate.”
MGA CEO Jos de Bruin has criticised the claims and reiterated the support for changes to competition policy from the Harper review, the ACCC and consumer group Choice.
“The cabinet needs to resist the BCA’s bullying and dissembling and show that it’s in tune with its broad base of business support as well as consumers,” he said.
“The BCA has the temerity to speak for all business when in fact it speaks only for an elite group of Australia’s biggest businesses. It arrogantly assumes that what is best for the BCA is best for everyone else.
“The BCA doesn’t want to see change, because Australia’s weak competition laws have supported the growth of its elite group of businesses.”