The Competition Policy Review Panel’s final report sets out many pro-competitive reforms which, if adopted, could significantly enhance economic productivity over the years ahead.
Competition in retail markets has been an important focus, including competition in grocery and fuel retailing, regulations on planning, zoning and trading hours, and specific regulations such as those affecting pharmacy and liquor retailing.
The panel’s recommendations include:
- More effective provision controlling misuse of market power (s46).
- Considering competition in planning and zoning rules.
- Removing remaining restrictions on retail trading hours.
- Remove pharmacy ownership and location rules.
- Promoting the development of industry codes with practical and effective dispute resolution processes.
- Examining liquor-licensing rules as part of a review of regulatory restrictions.
ACCC Chairman Rod Sims welcomed the pro-competitive recommendations of the review.
“The panel’s recommendations to expose more sectors of the Australian economy to competition show considerable scope for reform,” he said.
“The ACCC supports proposals to make the misuse of market power provision workable, to introduce a prohibition on concerted practices [to tackle cartel-like conduct that may otherwise be permitted) and to improve merger assessment processes.”
Minister for Small Business Bruce Billson also welcomed the report.
“We want to ensure that efficient businesses – big and small – can thrive and prosper in our economy and where success in a fair and competitive market is determined on the basis of merit and not purely muscle,” he said.
“Effective competition is the surest way to raise productivity and grow our economy, ultimately resulting in higher living standards, better-paying jobs and improvements to our quality of life.”
Mr Billson said some of the most important and overdue reform recommendations are for states and territories to consider.
“The panel has set a direction for all governments to remove regulatory restrictions to competition unless they are in the public interest,” he said.
“For instance, planning and zoning rules need to work in the long-term interests of consumers and not create unnecessary barriers to productivity and suppliers entering and meeting the needs of consumers.”
The Government has announced a focused eight-week consultation on the detailed recommendations made to strengthen Australia’s competition laws.
“A full Government response will be formulated in the second half of this year with the view to engaging states and territories in this area of co-regulation to develop a response action plan by the end of this year,” Mr Billson said.
Australian National Retailers Association CEO Anna McPhee said the ‘Competition Policy Review Final Report’ opens the door for a new wave of micro-economic reform in Australia.
“We would urge the Government to focus on tangible changes that are possible and put an end to the politicisation of barriers that chills investment and has a negative impact on the economy – like removing restrictions on parallel imports, retail trading hours and pharmacy ownership,” she said.
ANRA commends the panel for incorporating a road map, but will urge the Government to work faster on the long overdue areas of unfinished business.
“Extended periods of transition are unnecessary in the highly competitive and fast-moving global consumer goods market,” said Ms McPhee.
“In light of the Government’s firm commitment to reduce the regulatory burden, cost and dampening effect of red tape on business and the community, the Government’s response to the report should focus on removing regulation and complexity that adds to the cost of doing business and not on adding to the regulatory burden.
“Given the current economic environment, the Government must strike the right balance between prohibiting anti-competitive conduct and not interfering with efficiency, innovation and entrepreneurship that is pro-competitive and job creating.”
The National Farmers’ Federation (NFF) has also welcomed the Harper Review of competition legislation recommendations, backing up the NFF’s call for an ‘effects test’ – aimed at rebalancing power between large supermarkets and farmers.
NFF CEO Simon Talbot said the report to government is an important step toward reforms that will underpin Australia’s competitiveness for the next 20 years.
“The review is an important opportunity to improve competitiveness, increase returns to the farm gate and ensure transparency across the supply chain,” he said. “It recommends a number of sound, evidence-based settings that move us toward those goals.”
However, Australasian Association of Convenience Stores CEO Jeff Rogut says that the new competition rules will have the opposite effect and, that while opening the door for the major supermarkets to sell alcohol in-store while continuing to prevent convenience stores to participate in this category, the competition review has not only missed an opportunity, it has failed in its responsibility.
“The competition review recommendations, supposedly devised to put consumer interests first by providing more competition, appear to have completely ignored this responsibility,” Mr Rogut said.
“Inconceivably, the recommendations threaten to increase, not temper, the competitive advantages enjoyed by the major supermarkets while, at the same time, ignoring the interests of small retailers and the convenience of consumers.
“We strongly urge the Government, in its consideration of these recommendations, to recognise the anti-competitive landscape already in existence in the Australian retail market and prevent the balance from skewing further away from small businesses and independent retailers.”