Federal Innovation Minister Senator Kim Carr says there is "serious cause for concern about an abuse of market power" by Coles and Woolworths.
The Minister made the statement today in a forum his office described in a press release as "a meeting of more than 100 food and grocery stakeholders in Canberra."
"On the basis of the claims put to me, by reputable firms, there is serious cause for concern about an abuse of market power," he told the meeting, going on to say he intends to relay information about the alleged abuse to the ACCC.
"Everyone has seen their favourite Australian brands disappearing from supermarket shelves. The food industry is reluctant to speak out, and with good reason," the Minister said in a press release. "For most food manufacturers, their main access to customers is through the supermarket chains. They control up to 80 per cent of retail food and grocery sales in this country. In practical terms, you deal with Coles and Woolworths, or you go out of business.
Carr mentioned several practices, including auctions of shelf space, denying access to shelves, cancellation of contracts and forcing food manufacturers to pay freight are among the issues he feels consitute abuse of market power. The Minister also stated that the big two supermarkets are pumping suppliers for information about their future products and then using that data to inform development of their home-branded products.
"Such a practice has the potential to cripple innovation, destroy jobs, and erode our capabilities as a food producing nation," he said.
Carr has sent information about these practices to the ACCC.
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