Regulating Supermarket-Supplier Relations: Multi-Faceted Responses to a Multi-Dimensional Problem Professor Caron Beaton-Wells University of Melbourne 18 May 2016

The Problem ↓Retailer concentration ↓Imbalance in bargaining power ↓Bad behaviour

4 Competition Fairness Framing the problem

A Competition Problem? Horizontal Small retailers being displaced But the supermarkets competing HARD

A Competition Problem? Vertical Suppliers consolidating Questionable if dynamic efficiencies under serious long term threat

A Competition Problem? Regulatory responses Structural reform rejected Regulatory restrictions on competition to be relaxed (planning, trading hours) Misuse of market power prohibition to be reformed to focus on effects not purpose SME sector to benefit from broader policy measures to drive economic growth generally

A Fairness Problem? 72% of Australian consumers think the grocery market is too dominated by ‘Colesworths’ 90% say it’s important that their local independent supermarket survive 80% think competition is beneficial because it means lower prices, greater variety/choice, higher quality AND ‘a generally fairer society’ 76% want stronger competition laws and a more effective ACCC 91% think it is important that the government (through the ACCC) ensures big companies treat small suppliers fairly - Master Grocers Association (2015)

A Fairness Problem?

Regulatory responses Unconscionable conduct Unfair contract terms Food and Grocery Code

13 Competition HANDS-OFF Fairness HANDS-ON A High Level Reflection / Question? Tensions?

Comments and questions welcome 14