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Government in a spin while Australian retailing comes up trumps - Retail response to ACCC Grocery Prices Inquiry

Peak retail industry body the Australian Retailers Association (ARA) has criticised the Minister for Competition Policy & Consumer Affairs Chris Bowen’s response to the ACCC Inquiry into Grocery Prices.

ARA Executive Director Richard Evans said plans to introduce unit pricing, the grocery choice website and creeping acquisition laws will do nothing to reduce grocery prices for consumers.

"Anyone who thinks grocery prices will be reduced after this inquiry mustn't understand the complexity of the retail market. Placing restrictions and additional compliance requirements on the retail market will only increase costs for retailers.

"Plans to introduce a mandatory unit pricing scheme will increase costs for retailers without necessarily decreasing the weekly grocery bill for consumers. It is favored in other countries, but the assumption that unit pricing would enable Australian families to cut their grocery bills is deceptive and currently there is no consumer demand for such a scheme.

"Unit pricing is an unnecessary financial and regulatory burden for retailers and nothing more than political spin. Retailers will happily comply, but consumers will pay - so why? " Evans said.

"Retailing is an extremely competitive market. However, it is not driven by retailers, it is driven by consumers and the retail market responds to consumer demand. Economies of scale make it difficult for small retailers to compete against larger brands but the Rudd Government will only increase costs for retailers, and ultimately consumers, by placing restrictions on the market and compliance requirements on retailers.

"The ACCC's report highlights that ‘any weakening in the level of competition in retailing is unlikely to have been a substantial contributor to food price inflation in Australia'. Indeed there are many other factors attributing enormously to grocery prices including supply and demand changes in international and domestic markets, increases in the costs of productions, domestic weather conditions, fuel prices, occupancy costs and labour rates.

"This inquiry has been effective. It proves Australian retailing, with a couple of tweaks, is world's best practice," Evans said.

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