Consumers’ Federation of Australia responds to COVID19 cooperation proposals from banks & supermarkets

The Consumers’ Federation of Australia (CFA), the peak body for consumer groups nationally, has made two submissions to the Australian Competition & Consumer Commission (ACCC) responding to authorisation applications from Australia’s banks and supermarkets.

Businesses can seek authorisation from the ACCC where conduct risks breaching competition laws but is in the public interest. More than a dozen industry groups have approached the ACCC seeking authorisation to enable them to cooperate to respond to the COVID19 crisis.

While CFA supports the aims of the banking & supermarket industries, their submissions have raised a number of issues of concern to consumers. In particular:

  • While supporting the stated aim of ensuring fair and equitable supply of essential supermarket products, CFA has told the ACCC that the authorisation application risks long-term negative impacts on competition. This is because the proposal is drafted too broadly, enabling supermarkets to possibly exchange commercially sensitive information, for example, as to their margins and the details of their agreements with suppliers and service providers. Such activity could have longer-term negative impact for competition and consumer prices.
  • CFA has supported the banking sector’s application relating to the development of joint financial relief programs and measures to improve access to banking during the crisis. The submission suggests, however, that banks should consult with consumer groups on the detail of its initiatives and report publicly on their outcomes.

Gerard Brody, chair of CFA, said “There is need for public scrutiny about coordinated action by businesses in Australia.”

“In normal times, co-ordination among competitors leads to complacency, inefficiency and higher prices. The last thing consumers need during COVID19 is opportunistic behaviour by important sectors like supermarkets and banks. We urge the ACCC to consider input from consumer groups and only authorise conduct that is in the public interest.”

CFA will be considering other authorisation applications made by industry sectors, including the telecommunications, energy and life insurance sectors over the coming months.

View the submissions:

Submission on Interim Authorisation for Participating Supermarkets

Submission on Interim Authorisation for Australian Banking Association