The Coalition recently proposed legislation to require firms in specific industries to divest assets if they are deemed to have abused their market power.
The divestiture powers will especially target supermarket and hardware companies with yearly revenue of more than $5 billion, including Coles, Woolworths, and Bunnings.
On Tuesday, Prime Minister Anthony Albanese announced a new mandatory food and grocery code of conduct, which is slated to commence next April.
Albanese also committed to introducing legislation by the end of the year that will impose multimillion-dollar penalties against supermarket giants who breach the rules.
Former Australian Competition and Consumer Commission (ACCC) chairman Allan Fels wants powers to break up anti-competitive business structures, which were “standard in the US”. However, Fels said such powers had long resisted in Australia through “the power of the business lobby”.
Fels believes “the existence of that power would have a tremendous deterrent effect”.
“We need a divestiture power in general, in that law, the whole competition law”, he said.
Australia’s supermarket sector is one of the most concentrated in the world, and there is merit in implementing divestiture power into our competition law.
That said, Australia’s policymakers, the media, and the ACCC are focussing on the wrong cartel.
Where Australia really needs action is in the energy sector, where a small number of foreign-owned corporations have acquired control of the East Coast gas market. They ruthlessly gouge us and charge us monopoly prices while exporting more than two-thirds of our gas to Asia.
That is the area that policymakers and the media should be targeting. If it wants to break up anything, it should break up the energy cartel on the East Coast, where there is no domestic gas reservation.
The energy cartel is forcing East Coast residents to pay some of the world’s highest gas prices, despite the fact that more than two-thirds of that gas is exported. These high gas prices have also driven up electricity prices.
The energy inflation that we are experiencing on the East Coast impacts everything.
It contributes to all other forms of inflation. It raises household and business costs. And it is driving our manufacturing industry out of business.
That is where policymakers, the media, and the ACCC should focus.
The gas cartel is literally destroying Australia.
