Supermarkets could soon be forced to disclose their intention to purchase real estate, in a bid to block land-hoarding and make the sector more competitive and price-friendly for customers.
Announcing a $30 million boost for the consumer watchdog to investigate unfair practices on Tuesday, Treasurer Jim Chalmers said the government would work with states and territories to prevent grocery chains land-banking.
The move follows concerns supermarkets are buying retail blocks with no intention of developing them, in order to prevent competitors using the location.
Australian Competition and Consumer Commission chair Gina Cass-Gottlieb said it was currently only voluntary for supermarkets to inform the watchdog if they acquire land, and backed calls for that to be mandatory.
“We can test the competitive significance of the land acquisitions that are being undertaken,” she said.
‘We do not get notified when there is an acquisition of land for a supermarket or of a shopping centre that contains a supermarket. We’re not assured of that.”
An interim report by the watchdog said it had received concerns about alleged land-banking practices, which was increasing barriers for other companies to enter the market.
Woolworths had interests in 110 sites for future use and Coles intended to use 42 sites, the report said, while Aldi had 13 undeveloped locations.
The watchdog was aware of the need for competition around the supermarket sector, Ms Cass-Gottlieb said.
“We are very conscious in our competition assessments to look at what are the features of the local areas in which the competition is taking place and where competition may be changed and lost,” she said.
“This is such a critical time for consumers with cost-of-living pressures when it is important to be able to rely on pricing and the functions and qualities of products.”
A crackdown on land banking would result in cheaper groceries at the checkout and allow for smaller players in the sector to expand, Dr Chalmers said.
“This is all about … more sites for potential competitors to the big supermarkets, we want to make sure people are getting a fair go at the checkout,” he told reporters.
“I’ll also work closely with states and territories to progress reform of planning and zoning regulations as fast as possible so we can boost competition in the supermarket sector by opening up more sites for new stores.”
The $30 million boost will aid the commission in monitoring behaviour and investigating concerns about falsely justifying higher prices.
Customers needed to be able to get the best value when they shop, Prime Minister Anthony Albanese said.
“We want supermarkets to do the right thing, now if they don’t do the right thing voluntarily, we’ll mandate to make sure they do the right thing,” he told reporters in Melbourne.
The extra funding comes a week after the watchdog said it would take Coles and Woolworths to court over allegedly misleading specials.
The commission claimed the major supermarkets had briefly increased the prices of items before placing them on special as a promotion at a slightly lower price but still higher than its original cost.
Coles and Woolworths make up 67 per cent of the supermarket sector in Australia.
The government in September released a draft of a new mandatory Food and Grocery Code for consultation, which would impose multimillion-dollar penalties on companies for serious breaches.
The code, which was previously voluntary, had governed the relationship between supermarkets and suppliers.
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