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Australian supermarket giants could be cut down to size

Australian Competition and Consumer Commission chairman Rod Sims’s disclosure that the competition regulator has escalated an investigation into the two big supermarket chains over possible anti-competitive behaviour towards suppliers is a watershed moment.

The competition regulator can demand that information be supplied to it in the formal investigation it is now running, so allegations that the supermarkets misuse their power in their dealings with suppliers will finally be thoroughly examined. It may in time come to be seen as the point at which the enormous power of the two retailing giants finally began to be reined in.

When Sims says that the Australian Competition and Consumer Commission is now investigating whether the "major supermarkets" breached competition law in their dealings with suppliers he is talking about Woolworths and Wesfarmers-owned Coles, the two chains that dominate grocery retailing in Australia.