Australian Supermarket Giants Accused of Engaging in Land Banking

Australia ’s two largest supermarket giants have been muscling out competition from independent grocers by buying property or blocks of undeveloped land and holding on to it, in a practice that is legal but “flies under the radar”, the Senate inquiry into supermarket prices has heard.

Ramage said the practice was not “particularly overt and obvious” and often went undetected, as the ASX-listed grocery giants are not obligated to report land or property purchases to the competition regulator. In one case, regarding the sale of a Foodland store in South Australia’s Brighton, Coles made a high offer to purchase the supermarket, which Ramage said Metcash was “forced” to match before reselling it to another independent for a lower price.

Responding to Ramage’s comments, a Woolworths spokesperson said the supermarket was focused on its business of growing stores and servicing communities, not that of its competitors. “When you go to one of our supermarkets, you will often see an independent bakery, butcher, fruit and vegetable grocer or delicatessen close by, for example, creating competition which ultimately benefits customers.”Neither Metcash nor Aldi, which also appeared at the inquiry on Thursday, support the proposed divestiture powers that the Greens have pushed for. These powers would see supermarkets forced to sell stores if they get too big.

Source: News Formal (newsformal.com)

Australia Supermarket Giants Land Banking Competition Independent Grocers Woolworths Coles

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