COSBOA calls on Coles and Woolworths to voluntarily divest to let Australian innovation flourish

 

THE Council of Small Business Australia (COSBOA) has called on major retailers Coles and Woolworths to voluntarily divest in order to free up competition and innovation in Australia.

The call comes as part of COSBOA’s submission to the Harper Review – the first comprehensive review of competition laws and policy in Australia in more than 20 years. The review panel, headed by economist Professor Ian Harper, recently released its Issues Paper and has asked for stakeholder submissions before the final report, expected to be released in 12 months.

"We have provided a range of recommendations and solutions, but the best way to solve this problem once and for all is to divest Coles and Woolworths,” says COSBOA CEO Peter Strong.

“We understand that involuntary divestiture is unlikely and difficult, so we call upon the boards of Woolworths and Coles to voluntarily break themselves up into several companies.

"They should do this in a way that benefits their shareholders and frees up competition and innovation.

“This is not just about competition between retailers; our submission highlights the negative effects on innovation and productivity that is currently occurring in Australia,” says Mr Strong.

“One major cause is the stifling impact on the great innovators of Australia, small business people, by the domination of a few large companies. Our standard of living will decrease unless we can liberate our innovative spirit from the chains of mental bondage created by the overly powerful duopoly and large landlords.”

Mr Strong points out that ACCC Chairman Rod Sims has also highlighted productivity as an issue that needs to be addressed and laments the loss of a pro-competition culture. Sims says innovation will come from competition, real competition, and the recommendations from the review must make competition free and fair.

Mr Strong adds: "There are many other negative outcomes that come from this domination by a few, including effects on our culture. Small business people can enrich and grow our culture through their activities, while the big end of town can often be predictable and cultivate consumerism rather than a culture of community."

See COSBOA’s full response to the Competition Policy Review HERE

See a copy of Rod Sims Speech HERE

www.cosboa.org.au

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