Australia lagging on merger reform, ACCC warns

Lat year, Chalmers said Australia’s rules might be too permissive and could pave the way for mergers that did not deliver benefits to consumers, workers and the national economy. He said that while they did not explain all of Australia’s productivity problems, they might have contributed to weaker productivity in recent decades.

Research commissioned by the Competition Review Taskforce shows there are between 1000 and 1500 mergers a year, with only 330 of those notified to the ACCC. About half of those acquisitions are made by the largest 1 per cent of businesses.

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Cass-Gottlieb pointed to Woolworth’s planned merger with Petstock that had helped unveil the pet retailer’s “large number of concerning acquisitions” that had affected competition but had not been disclosed to the regulator.

She said the rise in market concentration had resulted in a “noticeable weakening of the intensity of competition” in a range of sectors.

“The record of what has been achieved during the informal regime, which in the vast majority of cases is occurring through ACCC scrutiny, we need to bring the benefits of that through a mandatory notification scheme,” Cass-Gottlieb said.

“Because it’s voluntary and the vast majority are not notified, we can’t assure the company we’re doing the job we’re asked to do [which is to maintain a healthy level of competition].”

Business groups are concerned giving the ACCC greater power to block mergers would hurt the economy and damage Australia’s international reputation.

In her first interview since Prime Minister Anthony Albanese announced a year-long ACCC investigation into supermarket prices, Cass-Gottlieb said she was confident the inquiry would benefit consumers’ hip pockets.

The regulator will probe the difference between the prices received by producers at the farm gate and those paid by consumers at the checkout, as supermarkets come under increased pressure over price gouging.

“There is considerable value in shining a really strong light and using all of the powers we have to identify what the pricing practices are, where the margins are,” Cass-Gottlieb said.

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“We do know these very deep, well-informed reviews produce benefits for competition and consumers.”

The last ACCC supermarket inquiry in 2008 led to the abolition of restrictive tenancy provisions that might have prevented shopping centres from leasing space to competing supermarkets.