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Monday, 24 November 2008

Trade Practices Act fails small business

29/08/2007 10:55:00 AM.  | Alan Jones

I've been talking at length about the Trade Practices Act.

And basically, story after story of Woolworths charging what they like because they've got a virtual monopoly position.

Yesterday it was avocadoes.

The grower getting 50 cents, Woolworths charging $2.95.

Or the man from the little chicken shop at Balmain selling chicken and mashed potatoes, the best he can do is 20 bucks.

Fresh mashed potatoes, fresh chicken.

But Woolworths are after him, 50 metres away, 15 dollars.

Callers telling me that Woolworths can sell at a price cheaper than they can buy the same product wholesale.

Australia can't go on like this.

You may not have noticed, but on Friday British Airways and Korean Air were fined the equivalent of 375 million Australian dollars each by the US Department of Justice.

A total of 725 million Australian for their involvement in a price-fixing cartel to rob consumers and small and medium sized businesses.

The penalty included 200 million US for price-fixing based on the estimated cost to its customers of the higher charges, and US 100 million for conspiring to fix passenger fuel surcharges.

Under the US sentencing guidelines British Airways would have faced a maximum fine of almost a billion dollars, based on the amount of cargo and passenger ticket sales affected.

In other words, the extent of the rip-off.

The judge opted for a lower figure of 300 million because he took into account the 121 million pounds already imposed by the UK Office of Fair Trading.

He took into account the potential fines that British Airways still faces from the European Commission.

Collusion by big business over long haul passenger fuel charges.

A levy imposed on tickets to cover the rising cost of oil.

Between August 2004 and January 2006.

The cartel was broken up when Virgin Atlantic blew the whistle.

But it's not over.

The conspirators behind this criminal activity that robbed from small business and consumers now face gaol.

The London Guardian newspaper wrote, "Those under suspicion of price-fixing fuel surcharges to cargo could be deported under the extradition treaty between the UK and the US ... they could face up to ten years' gaol."

Well, the big mistake that the conspirators made is that they should have elected to engage in this price-fixing in Australia.

We have no criminal penalties under the Trade Practices Act.

Indeed the ACCC have told us that price gouging is not a crime.

But not only do we have no criminal penalties, what is the chance of getting caught.

And what chance do you have when Government and the ACCC still live under the delusion that Woolworths and Coles deliver low prices.

Three years ago Peter Costello promised to introduce criminal penalties under the Trade Practices Act.

That's not happened.

Perhaps we want Australia to become a haven for price fixing cartels.

Why can't our Trade Practices Act be brought into line with the rest of the world?

Why does Government stand by and see small business and consumers robbed of hundreds of millions of dollars by outfits like Woolworths and Coles?

And I wonder who the small businesses that have been wiped out will be voting for at the next election?

And I wonder does the Federal Government realise the consumer is aware of what's going on.

It's pretty simple stuff.

All the Government has to do, and Peter Costello, is to announce the introduction of criminal penalties for cartels and take a stand on behalf of small business and consumers.

It's not difficult.

COMMENTS

Monday, 03 September 2007

The amount of market control the the "big two" have in Australia is not acceptable, they have virtually no competition and its become almost impossible for imdependents to survive. This has also become the case overseas where retail giants such as UK supermarket Tesco have expanded into so many other markets that they can't simply be classified as a grocery store. Something needs to be done to regulate cometition and the trade practices act is a good place to start.

Posted by: Rebecca P, Sydney

 

Monday, 10 September 2007

Agreed This is one area John Howard really needs to act and get some browny points at the same time.

Posted by: Bart Ristuccia, Sydney

 

Friday, 16 November 2007

Having worked for woolworths for a great many years they really need a strong competitor to knock them off their perch. When you buy fruit and vegetables from them they have been frozen and then the price of bananas that is a big joke the government needs to look at their trade practices which are ripping off the people of australia

Posted by: Barbara Luke, The Oaks

 

Tuesday, 13 May 2008

I want to know information about the business trade act in Equatorial Guines Africa

Posted by: Abiodun Philips, Dubai

 
 

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