Prev
Next

A lazy government body that needs to get moving

Frank Zumbo

by Frank Zumbo

14 Mar 05:35am

Must Reads

The Punch is moving house - this is a caption

The Punch is moving house

385

Will Pope Francis have the vision to tackle this? - this is a caption

Will Pope Francis have the vision to tackle this?

122

Advocating risk management is not “victim blaming” - this is a caption

Advocating risk management is not “victim blaming”

251

Filed under: Accc, Coles, Consumers, Supermarkets, Woolworths

41 comments

Have you ever dealt with the ACCC? Have you ever had an issue that you thought the ACCC should be looking at only to find that the ACCC declined to look at it or seemed to take forever to investigate?

Why would I go and battle with the supermarkets when I can lie here and sip some wine?

Just ask any supplier or farmer who has had an issue or concern with the major supermarket chains. For well over a year the ACCC has been taking the public position that there’s no evidence to justify an investigation into the alleged practices of the major supermarket chains. Then just recently the ACCC starts actively asking suppliers to come forward with their concerns.

Now there are a few issues that need to be immediately clarified. First and most importantly the ACCC doesn’t need to wait for suppliers, consumers or anyone else to come forward with a complaint in order for the ACCC to investigate. Where the ACCC suspects a possible breach of our competition and consumer laws it can investigate any matter within its jurisdiction and has the power to collect information as part of any investigation.

The ACCC can and should collect its own evidence. And there’s no doubt it has ample power to do so. The ACCC can require people to answer questions. It can require a supplier, a CEO or any other employee of a major supermarket to give evidence under oath where the ACCC has reason to believe that there could be a breach of our competition and consumer laws.

That’s a serious power allowing the ACCC to get to the bottom of any concerns relating to the major supermarket chains in a timely manner.

Does the ACCC always move to investigate and collect its own evidence in a timely manner? The most recent debate surrounding the major supermarket chains was sparked on Australia Day 2011 and has now been raging for over a year. Back in late January or early February 2011 the ACCC could have immediately announced that it was investigating whether there was any predatory pricing or misleading conduct in the supermarket sector.

Both major supermarket chains had announced that they were cutting prices on some products and the real question was whether those announcements were giving consumers the incorrect impression of price cuts across the full supermarket range when in fact only a fraction of shelf prices were being cut.

With up to 20,000 products or more in a major supermarket the key issue for the ACCC was to determine what was really happening to the price of all products across the supermarket range. More specifically, were a few well publicised price cuts drawing attention away from price hikes elsewhere or from less frequent discounting by the major supermarket chains on other products across the supermarket range. Since either scenario would obviously mean that consumers were really worse off the onus was clearly on the ACCC to ask all the right questions on behalf of consumers.

Did the ACCC ask all the right questions of the major supermarket chains? Well, we don’t know and that’s why we need an independent review of the ACCC. The ACCC moving quickly to investigate potentially anti-competitive, unconscionable or misleading conduct is absolutely essential to effectively protect competition and consumers.

We need a full scale independent review of the ACCC for the simple reason that we need to be confident that the ACCC is getting it right when it comes to competition and consumer matters. An ACCC failure or mistake can have significant negative consequences.

Take for example the issue of mergers and acquisitions. The ACCC has the ability to stop mergers and acquisitions that may substantially lessen competition. Now the substantial lessening of competition test is very difficult to prove, but it’s critical that the ACCC moves quickly to stop anti-competitive mergers and acquisitions.

The problem has been that the ACCC has generally only stopped a small percentage of mergers and acquisitions. Remember the ACCC allowed the big banks to take over or neutralise its smaller, but vigorous, competitors. And it has been the ACCC that has allowed the major supermarket chains to increase their dominance in the grocery, petrol and liquor markets.

The ACCC has essentially stood by and allowed creeping acquisitions where the major supermarket chains have acquired independents in a piecemeal fashion over a period of time. While individually these small scale acquisitions don’t generally substantially lessen competition, they can have the effect of dramatically reducing competition over time.

Can the ACCC have done more to stop creeping acquisitions? Well, we don’t know as we generally get very little feedback from the ACCC on those occasions it has considered creeping acquisitions.

Again, an independent review of the ACCC would look closely at the ACCC’s approach to mergers and acquisitions. An independent review of the ACCC would also get to the bottom of the ACCC’s defeat in the Metcash/Franklins case. Here the ACCC was trying to stop Metcash, the independent grocery wholesaler, from acquiring Franklins stores.

While of course we should expect the ACCC to do all it can to stop anti-competitive mergers and acquisitions, the Metcash/Franklins fiasco, where the ACCC lost so comprehensively in the Federal Court, simply confirms that the ACCC had made a mistake in trying to stop the wrong merger or acquisition.

Franklins was coming under increasing financial pressure and its commercial failure would have simply meant that Coles and Woolworths would have most likely ended up getting all the best Franklins sites. A sale to Metcash would have maximised the chances of the Franklins sites remaining in independent hands.

Surely, having additional, efficient independents to take on the major supermarket chains would be good for competition and consumers. If the ACCC had been concerned with the power of Metcash it should not have allowed Metcash to have previously acquired the only other remaining major wholesaler to independents.

It was that previous acquisition by Metcash that had allowed it to effectively become a monopoly wholesaler to independents. If the ACCC was now worried about the power of Metcash, the ACCC only had itself to blame as it had allowed Metcash to get to that position.

So obviously the ACCC’s comprehensive failure in trying to stop Metcash from acquiring Franklins only serves to highlight the ACCC’s previous failure to stop Metcash effectively becoming a monopoly wholesaler to independents. We certainly need an independent review to see if there have been any other mistakes by the ACCC when dealing with other potentially anti-competitive mergers and acquisitions.

It’s time we give the ACCC a thorough check up to ensure that it learns from any previous mistakes and to make sure that we can have the strongest level of confidence in the ACCC. No doubt the ACCC believes that it’s a highly professional and efficient body and in those circumstances it would surely welcome a full scale independent review.

Most commented

41 comments

Show oldest | newest first

    • Spot on says:

      05:18am | 14/03/12

      My god dude +1 x 10.

      I work in a govt’ department. I would rather address a complaint with our ombudsman over something we have done wrong - and cost money… in an election year… in the minister’s electorate… to a pensioner… and been videoed doing it for the 6:30pm “OH MY GOD” shows - than try to get a cross-agency issue taken up by the accc.
      Your second sentence is their de facto motto.

      Reply

    • Mahhrat says:

      05:55am | 14/03/12

      Last Thursday I went to a trivia night.  One of the questions was something like, “Who is the largest controller of poker machines in Australia”?

      The answer is Woolworths, of course.

      One other person in our 8-strong table knew it, the other 6 were absolutely shocked.

      Not only is the ACCC not doing its job, but the public in general are unaware at just how big the reach of some of these “corporate giants” are.

      Personally, I’d like to see the ACCC investing time into reducing the reach of companies deemed “too big to fail”.  No private enterprise, who has only it’s bottom line at heart, should become so big that to see it collapse can cause a GFC-style event.

      While it’s far from perfect, the IDEA of our government system is to vest control in people accountable to the public.  Private enterprise has no such control.  Corporations declaring they’re “too big to fail” should be required to reduce their holdings to the point where they are again small enough to. 

      It is an unacceptable risk to place upon our society that our future depends on people we don’t vote for.

      Reply

    • Chris says:

      08:20am | 14/03/12

      Mahrat,

      Technically, Australian Leisure and Hospitality Group owns and controls the machines, not Woolworths which is a shareholder…

      Just sayin…

      On a more interesting note, let’s say that ALH decided to sell 100 of its licensed venues in the next six months in accordance with your plan that all big companies should reduce their holdings.  Who would buy them - and at what price?  Not a lot of money floating around at the moment - are you suggesting (in this wondering capitalist society of ours) that ALH should be forced to take a bath on sale prices just because they have been successful?

      Cheerio,
      Chris

    • Mahhrat says:

      12:07pm | 14/03/12

      @Chris:  I’m not saying it has to happen in six months.  Building that business took years, I see no harm in it taking years to divest itself either.

      Fact remains, Goldman & Sacks and others collapsed spectacularly, yet the effects of it were forced to be ameliorated by governments, using our money, because their total failure would do MORE damage to the economy.

      That is no free market - that is a capitalist market held to ransom by the power of private companies.

      I get that ALH is not the best example here, so let’s take an easy one for sake of argument - petrol pricing.

      What do you reckon would happpen tomorrow, should the big 3 decide to make fuel $5 a litre (or some other ridiculous amount)?

      Now, I get that government would intervene and whatnot, but how?  They would take too long.  Businesses would theoretically start up to go into competition, but those would take years.

      $5 a litre fuel would cripple Australia within a fortnight, I would hazard to guess.  The price of nearly everything would go nuts.

      All because 4 small groups of people might decide to.

      My argument is that that is an unacceptable risk.  Nobody not elected by the public should have that kind of clout.

    • Barge says:

      02:18pm | 14/03/12

      Who holds the greatest responsibility for making Woolies / Coles become large controllers of Poker Machines. The answer is the Qld Labor Party. Coles & Woolies just wanted to be able to sell alcohol in bottle shops as they do in most States. The Qld Labor Party said no and introduced legislation that requires you to own a pub in order to sell take away alcohol. Coles & woolies just bought the pubs and inherited the pokies as part of the deal. They haven’t looked back.

    • Al says:

      06:49am | 14/03/12

      “More specifically, were a few well publicised price cuts drawing attention away from price hikes elsewhere or from less frequent discounting by the major supermarket chains on other products across the supermarket range. “
      And if they were, so what?
      Isn’t it up to the business which products they offer on discounts and by how much?
      Isn’t it up to the business what they charge (or price) for products?
      I have never realy understood what buisness the ACCC has to do with these issues.
      Acquisitions by companies that reduce overall competitivness, sure.
      Even price fixing should be within their role.
      But the everyday prices charged or discounts (or number of discounts) offered should not be considered by them at all, if a businees decides they can afford to make a loss on certain products that is their choice, if they decide to raise the price of products, that is also their choice.
      If consumers are too stupid to keep track of what they are spending that is the consumers fault. If they don’t like it there are other options available. That is WHY the ACCC has power over acquisitions and price fixing (or collusion) but should not over the normal decisions of what to charge the customer for a specific product, nor whether discounts in one area reduce discounts in another area of a business.

      Reply

    • SteveKAG says:

      07:12am | 14/03/12

      Putting aside a perceived issue with the supermarkets (I am not yet convinced there is an actual issue here) the ACCC to me is acts like a bully boy. It flexes its muscles where it can and often needlessly and does nothing in area’s where it should.  Why do all petrol stations put their petrol up and down on the same days in a week by as much as 15cpl?
      Why do the banks put interest rates up outside of the official RVB rate?

      These are questions i am more interested in than milk getting discounted to $2 and a bunch of farmers complaining (by the way they complain all the time but dairy farmers still get a brand new ute ever two to three years).

      Reply

    • Al says:

      08:36am | 14/03/12

      “Why do all petrol stations put their petrol up and down on the same days in a week by as much as 15cpl”
      Because the employees of those petrol stations are directed to go and check the prices of competitors nearby as part of their duties and report it back to head office (I know because I briefly worked at one), who then tell them what they need to charge. I belive they are not meant to do this, or maybe they just use a loophole in that they are not ‘discussing’ the price changes between the companies.

    • Craig says:

      07:23am | 14/03/12

      The ACCC is poorly resourced and has to function in a highly politicized environment.

      They are highly risk-averse. Make one investigation that fails in court due to insufficient evidence, costs too much to defend or puts a ‘connected’ business nose out of joint and the government takes subtle steps to rein them in - by cutting their budget or rearranging their priorities.

      Even a simple phone call from a Ministerial advisor to a senior ACCC bureaucrat is enough to have them drop a ‘hard’ investigation for one which is ‘more likely to end in a positive outcome’ - does not hurt someone who is mates with a Minister.

      There is no way the ACCC can be effective based on how its top officers are Appointed and the culture of the organisation they breed.

      There is no such thing as an independent body in government when the funds and senior appointments are controlled by the governing party.

      So I don’t blame the ACCC for their issues. In fact I believe they try very hard to be independent and effective. However the golden rule still applies, follow the money trail to see who pulls most of the strings.

      Reply

    • acotrel says:

      08:46pm | 14/03/12

      So what’s new ?

    • Pete Duffy says:

      07:24am | 14/03/12

      Frank, I really enjoy your articles. And courage to speak out. What’s your advice on revving up the ACCC bureacrat that steadfastly denies we have any collusion on petrol prices on the north coast of NSW when despite a fluid international market last year our prices remained much higher than urban areas and he claims that ohh, “it’s a small market”. Or a small colluded market! Which may be true but surely some extra players would bring that back into line with other “market” forces?

      Reply

    • Al says:

      07:30am | 14/03/12

      “Why do all petrol stations put their petrol up and down on the same days in a week by as much as 15cpl”
      Because the employees of those petrol stations are directed to go and check the prices of competitors nearby as part of their duties and report it back to head office (I know because I briefly worked at one), who then tell them what they need to charge. I belive they are not meant to do this, or maybe they just use a loophole in that they are not ‘discussing’ the price changes between the companies.

      Reply

    • Al says:

      08:35am | 14/03/12

      This was meant to be a reply to SteveKAG

    • SteveKAG says:

      08:53am | 14/03/12

      By this definition then that is price fixing which is the very mandate of the ACCC.
      Coles reduces the price of milk to $2, to ensure they retain market share Woolworths does the same, that is hardly price fixing when you are doing it to retain market share and the price is advantageous to the consumer.

      The ACCC have got it all screwed up i think.

    • Al says:

      10:03am | 14/03/12

      SteveKAG - That was kind of the point. I consider it price fixing, however I belive they use a loophole in the legislation to get around it.
      What the ACCC generaly consider price fixing is if different companies get together and negotiate ‘we will both charge $XXX for this product we both sell and neither of us will discount it’.

    • Doxastic says:

      12:04pm | 14/03/12

      Could you give me an example of anybody, anywhere selling anything who doesn’t take an interest in what the going rate for their product is? [*]  This is not price fixing; it’s not illegal; it’s not a loophole; it’s good business practice.

      Price fixing would be if the oil companies got together in private and agreed what price they should charge but the constant price jockeying at the retail level tends to indicate that this is not happening.

      [*]  ... except the ACCC of course.  It doesn’t have competition.

    • Mahhrat says:

      08:21am | 14/03/12

      “...no KPIs…”

      +1

    • Al says:

      08:34am | 14/03/12

      Tubesteak, your full of shit. “They’re staffed by people with no KPIs and permanent jobs which they can’t really be fired from.:
      KPIs are actualy REQUIRED to be in place in any government department, if you don’t meet the KPIs you receive warnings and if you don’t improve you get terminated.
      “can’t really be fired from” - more bullshit.
      I work in a Government Department (and have worked in a number over the years), the employees must meet KPIs and can (and have been) fired.
      The biggest problem is that most departments have insufficient numbers of staff at the lower levels doing the grunt work and too many in executive levels managing (or interfering as I prefer to put it) getting hte job done.
      It’s not the general staff who the public deal with that are the issue, it is the higher levels.
      And of course if you look at recruiting for the Public Service you get blasted as it being unnecasary, and then people wonder why you can’t get the same speed of service previously despite a minor increase in the front line staff v’s a large increase in people accessing that service.

    • Al says:

      09:45am | 14/03/12

      Not sure why my last response wasn’t published. In summary:
      Public Service are required to have KPIs in place. To say otherwise is simply false.
      Public Servants can also be fired if they don’t meet KPIs and don’t improve their performance, so again saying otherwise is simply false.
      As for being slow to act, you will find that this is due to the fact that whenever there is a reduction or staff cut, it is the frontline staff who go, with the executives (or management) who stay. The biggest problem is the uneccasary level of executives (or management) and the lack of front line staff.
      The other question I would have is this. Why do people seem to think they can expect the same level of service from Government Departments with the same staffing levels despite increases in the number of people (simple population growth) using those services? (Especialy when the number of recruited staff doesn’t keep up with demand, but the department can’t hire more due to their budget.)

    • Fiddler says:

      10:13am | 14/03/12

      @Tubesteak,
      The problem isn’t KPI’s. KPI’s are meant to be a guide of effectiveness. Unfortunately the KPI’s are used as the only yardstick, as opposed to actually just doing their jobs. And public service managers just ride the KPI’s so employees chase stats instead of doing their job properly

    • Mahhrat says:

      11:47am | 14/03/12

      Al, no he isn’t.  I’ve worked Federal and State systems all my life.  I’ve seen precious few actual KPIs worth a damn at any level of government.

      I have seen many policies, many procedures, many business rules and many good intentions.  Hell, I’ve written my fair share of the first three.

      In a world where every major service arm has either Australian Standards or their industry-specific accreditation standards are we still years and years from having procedures that roll them out?

      Saying all that, you are exactly right that the APS is very top-heavy.  This is because it is so impossible to effectively performance manage staff, because we have weak leaders (the politicians) who don’t want “involuntary redundancy” on their watch, that we get the whole “promoted to incompetence” going on.  This leads to more jobs at that higher-middle level, as agencies “work around” the idiots they can’t quite sack, can’t quite demote and can’t quite make do their damn jobs.

    • Economist says:

      12:43pm | 14/03/12

      There seems to be a lot oversimplistic nonsense from, all sides. Need I state that you have to look at everything on a cases by case, program by program, policy by policy basis!

      Of course the public service has KPIs, but these vary depending on the nature of the work, whether management of a program/contract, service delivery, legislation, communication, risk management geez I can go on. Contracts have definable outcomes as does service delivery, how about you pick up an annual report.

      Are KPIs manipulated sure at times, are they ignored yes at times, just as with private sector organisations. To suggest that you put a KPI in place at a point in time and expect it to stay that way in a dynamic world is ridiculous. I’ve worked for organisations both public and private where KPIs have failed to be met, and bonuses still paid, because external factors have a significant impact, but you have risk plans to control for these.

      I worked in governments where Ministers would rate your advice and correspondence with the public and of course rather than rate it on accuracy, content quality, it was mainly rated on whether it was embarassing to the government, in which case you got a zero, to embarassing to the opposition when they were running government, top marks , to I don’t give a shit about this issue, somewhere in the middle. 

      You could also have had a situation where you had one bloke effectively running an essential government program that had been around for years, was a world expert (worked considerable unpaid overtime), but wouldn’t receive his bonus because the program wasn’t sexy enough for the ministers. Compared to a new program that was the flavour of the month with sycophants telling a minister what they wanted to hear rather than it actually being a shit idea.

      So instead of gross generalisations how about you assess something (an organisation/policy/porgram/service )based on its actual value.

    • Economist says:

      12:57pm | 14/03/12

      Finally, I gather from Tubestea, that anything government is a waste of time, space etc. That he’s part of the lets halve the public service brigade. Well if you think there won’t be an impact on services from halving the number of public servants from 1.2million to 600000 you’ve got to be joking.

      I suggest you read Ross Gittins piece in the SMHAGE today. To add to that Australia has 1 public servant on the payroll to 12 citizens in the US it’s 1 in 13 though if you remove the military from both its closer to 1 in 13 and 1 in 18 respectively. I compare these countries as they both have 3 tiers ofr government and are a large nation or you can look at this spread   http://homepage.ntu.edu.tw/~lbh/ref/new2/1.pdf see how we’re at the lower end? Are we ever going to get as low as Singapore or Japan, well unlikely given the size of country and services required to be delivered across the country.

      Let me tell you when I went to international conferences or had visiting delegates we were considered to envy of the world with our ability to get things done reasonably efficiently and effectively, but of course there is always room for improvement.
      .

    • Al says:

      12:59pm | 14/03/12

      Mahhrat - Alright, maybe you have a greater scope of experience (I have been with only 4 different departments). In regards to KPIs they were required to have them and did terminate people who didn’t meet them on 2 consecutive performance reviews.
      Maybe it was just a recent requirement? But every one I have worked for definately have them and require employees to meet them. (And tell us they are required to have them by government and if they don’t then no funds).

    • Tubesteak says:

      03:55pm | 14/03/12

      I used to work at the ATO. There were no KPIs worth mentioning. It was woeful seeing the laziness and ineptitude on a daily basis. I still call it a daycare centre for adults

    • acotrel says:

      08:51pm | 14/03/12

      @Al
      It’s alright baby, some of us know the truth about public servants and the high incidence of stress related illness.

    • acotrel says:

      09:05pm | 14/03/12

      @Tubesteak
      You must know by now that ‘the system runs on bullshit’.  You don’t have to be part of it.  The way to buck the public service system is to actually ACHIEVE ! If you are a leader, make sure that your minions have sufficient information to self-manage.  Then you can delegate effectively. All the documented management systems are wasted if they place people into a straight jacket.  How many managers do you know who’ve sat down and written a comprehensive training manual ?

    • chuck says:

      07:53am | 14/03/12

      The ACCC is perhaps like the myriad of NGO’s and public service sections/departments/committees that have sprung up deliberately to shield the inability and incompetence of politicians/courts to do their jobs. The croquet team from outer Cumbucta has a better success rate than most!

      Reply

    • AdamC says:

      08:43am | 14/03/12

      Every few weeks the Punch runs a column from Frank Zumbo, always railing against what he perceives as an economy corrupted by anti-competitive conduct going unpunished, and other market naughtiness that the big players are supposedly getting away with. Normally based on little more that speculation, Zumbo’s plaintive call is always the same: why won’t the ACCC (or some other government instrumentality) doooooo something?

      Unfortunately, agencies like the ACCC exist in a far harsher world that the academic debating club. The ACCC needs to prove its accusations in Court, not simply the blogosphere or the staff canteen at Sydney University. And, sadly, Courts are more skeptical than Punch commenters. Therefore, you will have to excuse the ACCC for taking time to investigate matters and make a case, or for only taking on matters where there is some evidence of wrongdoing.

      Particularly unjustifiable is Zumbo’s accusation that the ACCC is lazy or cowardly in the matters it takes on. Has Zumbo read the papers in the last few days, which have been reporting on a very ambitious action the ACCC is taking against alleged price fixing in the travel industry? Likewise, when it comes to mergers and acquisitions, has Zumbo forgotten how the ACCC took the Franklins takeover all the way to the Federal Court and lost?

      Reply

    • TrueOz says:

      11:08am | 14/03/12

      @AdamC

      “The ACCC needs to prove its accusations in Court…”

      Clearly, you have never had to deal with the slothful, lazy, ignorant, incompetent, do-nothing staff at the ACCC. If you had, you would know that proving something before the courts is the furthest thing from their tiny minds. Frank has (on this occasion) failed to have a big rant about franchising, but I know from personal experience that serious and repeated complaints against franchisor conduct are routinely ignored by the air thieves employed to oversee the sector.

      When working on behalf of a friend last year, I wrote to the ACCC detailing in excess of 20 serious breaches of the Franchising Code of Conduct by a large Franchisor. After waiting for more than a month, I received a lazy response, effectively telling my friend to take the matter before the courts for determination. If a breach was proven in court, the ACCC might then review the matter.

      I then called the ACCC and spoke to the air thief who produced the letter. They advised me that they were well aware of the conduct I had outlined, and had received numerous complaints about the same Franchisor. When confronted about why the ACCC has taken no action to date, I was told that the matter was “under review”. That was 18 months ago - and not a damned thing has happened.

      The ACCC is rotten from the top down. It is staffed by lazy, incompetent, arse-covering air thieves, who work in a sheltered workshop environment. They are effectively accountable to no-one, and all but ignore the task they were established to take care of. They need to be abolished and dismantled.

    • Economist says:

      12:26pm | 14/03/12

      TrueOz, based on the evidence as presented, this is truly appalling, but the devil is in the detail. You’ve indicated serious breaches in a code of conduct but is this a matter of law, or a matter of fact. I’m no lawyer, but from my experience of when I worked in government they have a set of ltiigation principles and principles for undertaking investigations into serious breaches as outlined in an Act. Prosecutions are rare unless cases are well established with substantial evidence. Breaches of the Code of Conduct are not necessarily breaches of the law. The ACCC also work in a politicised environment and Minister’s can force no action.

      Examples like yours obviously occur, but I agree with Adam to suggest they are all nothing but lazy air thieves does not paint a true picture of the nature of public service work.
      Has your friend written to the Minister responsible for the ACCC?

    • TrueOz says:

      04:36pm | 14/03/12

      @Economist

      We are talking about breaches of both the (compulsory) Code of Conduct and the law. The ACCC couldn’t care less. Unless it’s in the headlines they pretty much don’t want to know about it.

      “...to suggest they are all nothing but lazy air thieves does not paint a true picture of the nature of public service work.”

      Perhaps this is the case in other government departments, although I would dispute that in many (or most) cases. In the case of the ACCC it is an objective description of their day-to-day reality.

    • Ben E says:

      08:49am | 14/03/12

      The ACCC should pay their employees very well, above market rate wages…....but everyone will be on a yearly contract. If they don’t deliver the goods, no contract renewal, no high paying job. The KPIs expected will be of the highest level.

      Reply

    • jase says:

      11:06am | 14/03/12

      The ACCC is a waste of resources, do you really think that business, especially big business is actually scared of these morons?

      Price fixing, it happens every day and countless small and large businesses participate in this act. It concerns me that people see price fixing as a negative, without price fixing we would have far less choice because many businesses would not take risk in certain environments and many just simply would cease to be in business.

      Promoting competition through the control and management of mergers and other aspects of business is nothing more than socialist government behaviour. Just let business do business, and the consumers to vote with their wallets.

      Reply

    • Al says:

      11:20am | 14/03/12

      Re: “Just let business do business, and the consumers to vote with their wallets.”
      That is fine, as long as there are competitors available.
      If every supermarket in Australia is owned by one big corporation and charge the identical thing for all their produce, how exactly do you propse consumers to vote with their wallets?
      This is why the ‘the control and management of mergers’ and acquisitions is necassary to maintain alternatives (or competitors).
      No competitors and they can charge what they like.
      And not everyone has the choice of sourcing produce and/or goods from the producer/manufacturer.

    • jase says:

      12:52pm | 14/03/12

      Whilst I agree a monopoly is not an ideal situation I can think of many examples where the ACCC and other government bodies have generate heavily protected markets which is simply not necessary.

      Telstra is a good example of this, they at one point regulated the industry to the hilt and look how that ended up.. Only recently have Telstra become competitive.

      Monopoly creates opportunity which leads to more innovative and competitive industry, highly competitive industries lead to a race to the bottom (airlines for example) where the consumer has gained choice at the expense of quality and service. (quality and service was rarely an issue during the 2 airline policy with Qantas and Ansett).

      Let the market make natural corrections rather than trying to regulate them into an unnatural result.

    • Arthur says:

      11:58am | 14/03/12

      Everyone can see a fuel price rise coming; it can be predicted with 100% accuracy ahead of a public holiday, or even every Thursday but the ACCC can’t see a correlation.

      They don’t know what a statistic is let alone how to analyze it. Sack the lot of them.

      Reply

    • Ray says:

      03:02pm | 14/03/12

      The best that can be said about the ACCC is that it is inconsistent. It appears to be indifferent to Coles’ and Woolies’ growing dominance of the grocery, liquor and petrol markets.

      Coles and Woolies are effectively using predatory pricing of their homebrands to force established brands off their shelves. Once the established brand is eliminated, they raise the price of their homebrands, which are generally inferior in quality to the established brands .

      Coles and Woolies are merciless in exploiting suppliers. Suppliers can suddenly find themselves without orders, thanks to the actions of the big two, and consequently face bankruptcy. Coles’ sister discount store, Target, recently abandoned its ethics altogether by insisting that suppliers reduce their already rock-bottom contracted prices by 5%.

      The big two are masters at manipulating the retail petrol prices, keeping prices high prior to holiday weekends, or whenever the Australian dollar rises.

      The big two are known to sell certain beer brands, e.g. Fosters,  below cost for predatory pricing purposes.
      Who can forget the ACCC’s opposition to Metcash’s proposed purchase of the Franklins supermarket chain , which would have built up scale and helped IGA and Franklins to compete better with the two majors.  Fortunately, the courts applied common sense to allow the Metcash purchase to proceed.

      Reply

    • AdamC says:

      04:31pm | 14/03/12

      Ray, using market power to obtain lower prices from suppliers is not predatory pricing. Likewise, selling house branded products means higher margins for the supermarkets. It is not illegal to do this.

      It seems to me that Coles and Woollies are damned if they do and damned if they don’t. If they don’t compete, they are stiffing consumers and, if they do, they are screwing suppliers or wrecking industries by doing things like selling cheap milk. (The scoundrels!)

      I don’t know what the ACCC is supposed to do about any of that.

      Reply

    • TracyS says:

      09:53pm | 14/03/12

      The only time I’ve seen the ACCC come down heavy on anyone was a few years ago when it prosecuted various groups of country doctors for “anti-competitive collaboration” for sharing the after hours hospital cover rosters between the various individual clinics. Baffling decision. Coming to an agreement on a roster harmed no-one; not being allowed to work collaboratively put the after hours health care of country patients at risk. I guess country GPs are soft targets and don’t have the resources to fight back like the grocery behemoths do.

      Reply
 
Sorry, comments are now closed for this article.

Facebook Recommendations

Read all about it

Punch live

Up to the minute Twitter chatter

ToryShepherd

ToryShepherd 19 May 13 10:27PM

@Cmdr_Hadfield @mattpturner Hope you have sweet views while you heal

Lucy Kippist

lucyjk 19 May 13 02:24PM

RT @HeatherSmithAU: Can living in another country change your life for the better? by @lucyjk on @newscomau f. moi http://t.co/E5Ma3kBut2

David Penberthy

penbo 19 May 13 01:02PM

@mooks83 sophisticated response. Think the kids parents saw it differently

David Penberthy

penbo 19 May 13 12:50PM

More class from 9's footy show, lampooning a baby that allegedly looks like Sterlo with a pic swiped from Facebook http://t.co/BGoYP6Pn68

See all tweets

Recent posts

The latest and greatest

The Punch is moving house

by The Punch Team

385

The Punch is moving house

Good morning Punchers. After four years of excellent fun and great conversation, this is the final post…

Will Pope Francis have the vision to tackle this?

by Hannah Harborow

122

Will Pope Francis have the vision to tackle this?

I have had some close calls, one that involved what looked to me like an AK47 pointed my way, followed…

Advocating risk management is not “victim blaming”

by Sarrah Le Marquand

251

Advocating risk management is not “victim blaming”

In a world in which there are still people who subscribe to the vile notion that certain victims of sexual…

Nosebleed Section

choice ringside rantings

From: Hasbro, go straight to gaol, do not pass go

Tim says:

They should update other things in the game too. Instead of a get out of jail free card, they should have a Dodgy Lawyer card that not only gets you out of jail straight away but also gives you a fat payout in compensation for daring to arrest you in the first place. Instead of getting a hotel when you… [read more]

From: A guide to summer festivals especially if you wouldn’t go

Kel says:

If you want a festival for older people or for families alike, get amongst the respectable punters at Bluesfest. A truly amazing festival experience to be had of ALL AGES. And all the young "festivalgoers" usually write themselves off on the first night, only to never hear from them again the rest of… [read more]

Light weight

Gentle jabs to the ribs

Superman needs saving

Superman needs saving

Can somebody please save Superman? He seems to be going through a bit of a crisis. Eighteen months ago,… Read more

28 comments

Newsletter

Read all about it

Sign up to the free News.com.au newsletter