A planned collective bargaining agreement for the nations small grocers could prove a gamechanger according to the Australian Small Business and Family Enterprise Ombudsman Kate Carnell.
The ombudsman has come out in support of a proposal by the Co-Operative of Supermarkets in Australia who have called for the option to participate in collective bargaining to reach better deals with suppliers.
Carnell says small supermarkets should be able to engage in collective bargaining to remain competitive and viable.
Carnell has written to the Australian Competition and Consumer Commission (ACCC) in support of the proposal which she hopes will allow small businesses to compete with the major supermarkets.
“Australia’s supermarket industry is in the midst of a long-running price war and that’s hurting small businesses. It’s nearly impossible for smaller players, with limited market share and purchasing power, to compete.
“The industry is dominated by Woolworths Group (34 per cent), Coles Group (27 per cent) and Aldi (11 per cent) collectively owning more than 70% of the market share. While other multinationals such as Costco, Kaufland and Amazon may dilute market concentration, Coles and Woolworths will likely continue to drop prices to remain competitive,” said the ombudsman.
“My office has been assisting a number of small businesses that have been subjected to predatory tactics used by large supermarket operators to financially squeeze their small suppliers.
Carnell described collective bargaining as a game-changer for small supermarkets and businesses because it strengthens their purchasing power.
“It would also contribute significantly to supply chain diversification, allowing small and medium manufacturers and growers to explore new markets while also promoting their sustainability and growth in domestic production, particularly in regional Australia.
“This initiative will help keep local shopping centres viable. If the supermarket closes, the whole shopping centre is likely to go as well.”