10
Sep 2020

No more inquiries, it's time to break up the supermarket oligopoly

Tweet about this post
4la1eimn7r.jpg

KENNEDY MP, Bob Katter says it’s time to break up the two Australian supermarket giants into 30 smaller companies, as their oligopoly has made farming untenable for producers who have no bargaining power when selling their products.

Mr Katter said the Federal Government should follow the lead of former American President, Theodore Roosevelt who used the Sherman Anti-Trust Act in the early 1900s to break up Standard Oil Co.[1]

“Theodore Roosevelt’s very famous legislation went after Standard Oil Co. when they had half of the world market,” he said.

“They broke Standard Oil into 34 companies of which 15 were still the biggest oil companies in the world. There’s no loss to the shareholders. In the case of Standard Oil, the share value of the 34 new companies was significantly higher than the share value of the original company.

“So there’s no downfall for the shareholders but there’s huge downfall for the CEOs who I presume in the case of the two supermarket giants, are paying themselves millions of dollars a year. Their underlings would be on similar figures. And they would be pretty stupid if they weren’t on those types of figures. The head of Qantas was paying himself $25m a year.”

An IBISWorld Pty Ltd’s 2018 report showed that the two major supermarkets had a 67.5% share of the market.[2]

Mr Katter said the two major supermarkets in Australia shouldn’t be allowed to open up any new stores, and they should divest themselves of a significant proportion of the stores and shares that they currently own.

“Who knows, there might be an Australian Government out there. Not an LNP or an ALP Government, but an Australian Government that would act like Australians and act on this issue,” he said.

“If you want to see the negative impacts of their dominant market share then look at dairy. Farmers were getting 43 cents-a-litre in 1991 for milk and the consumer was paying 93-cents-a-litre. That’s a mark up of just over 100 per cent.

“In 2020 Farmers are now being paid 48 cents-a-litre and the consumer is being charged 165 cents a litre. That’s a mark-up of nearly 250 per cent. The dairy farmers are being squashed and are leaving the land in droves because of it.

“Having only two corporations to sell their product to, ‘free-mark-it’ means the two major supermarkets are free to mark up the produce to what ever price they feel like. The farmers are paid a pittance!

“I am very much for unions, but the unions have site coverage at the two major supermarkets so the Labor party is not going to come out and bite the hand that feeds them and reduce the market power of the major supermarkets.

“The LNP won’t come out against the major supermarkets because they represent the big end of town. They’ve represented the big end of town since the death of Menzies and the death of the Country Party.”

Mr Katter’s statement comes as another ACCC inquiry looks into the market imbalance between farmers, processors and retailers.

“From recent memory, the federal Agriculture Minister has held inquiries into drought (we have no drought support), the dairy industry (crippled by his own party’s deregulation), Queensland’s reef regulations (backed by the Qld LNP and Labor Government) and now another inquiry into the major supermarkets power imbalance over producers,” he said.

“He’s not the Minister for Agriculture; he’s the Minister for Inquiries that lead to absolutely no change at all. He’s the mirror man because he’s always looking into everything, but he never acts in the interests of farmers.”
-ENDS-

Contact Details

Innisfail
P: (07) 4061 6066
F: (07) 4061 6566
Visit: Cnr Edith and Owen St
Post: PO Box 1638
Innisfail, Qld 4860

Mount Isa
P: (07) 4743 3534
F: (07) 4743 0189
Visit: 42-44 Simpson St
Post: PO Box 2130
Mount Isa, Qld 4825

Canberra
(when Parliament is sitting)
P: (02) 6277 4978
F: (02) 6277 8558

Local Call within the electorate
P: 1300 301 942

Email: Bob.Katter.MP@aph.gov.au