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Small business council calls for M&A reform

The Council of Small Businesses Australia is calling for reform to protect Australia’s small-business sector from corporate takeover from whichever government is elected next month.

Small business council calls for M&A reform
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COSBOA has made a number of recommendations that it hopes the newly elected government will consider implementing to ensure the country retains a diverse mix of independent and local businesses.

These recommendations include implementing overdue changes to unfair contract terms by ensuring the legislation is passed immediately upon Parliament’s return and increasing funding of the ACCC for more power to impose conditions on mergers that reduce anticompetitive impacts.

The council is also looking for an update of section 50 of the ACCC Merger Guidelines so the burden of proof should be on future scenarios in relation to market concentration, not proof of what has occurred in the past by implementing a review of the definition of the word likely in the merger test.

In regard to mergers and acquisitions, COSBOA is calling for mandatory notification for all mergers over a certain threshold to the ACCC, rather than a voluntary system (so that Australia is in line with Europe and the US).

COSBOA chief executive Alexi Boyd said that as the election gets closer, the major parties are announcing their plans for small businesses, but neither have announced anything in their policy platforms regarding competition reform.

“This is a major oversight. Australia’s current competition regulation doesn’t do enough to stop anti-competitive acquisitions or curtail market concentration, leaving small businesses vulnerable to being exploited by the duopoly of Coles and Woolworths, put out of business by big box retail chains like Bunnings and Officeworks, and bullied by big landlords like Westfield,” Ms Boyd said.

“You know it’s bad when even the immediate past Chair of the Australian Competition and Consumer Commission (ACCC) has called for reform, saying that our voluntary merger control regime is skewed towards making clearance the default and not in line with international best practice. The new ACCC Chair, Gina Cass-Gottlieb, has indicated that this is on her radar as well.”

Ms Boyd said the particular danger COSBOA is seeing at the moment is big businesses creeping in and trying to take advantage of the invisible supply chain, the parts of the supply chain.

“They use aggressive tactics to acquire other businesses with the intention to dominate the market end-to-end – from logistics through to distribution through to shelf space – extending their control and influence to every part. An example is Woolworths’ acquisition of PFD foods, which the ACCC could do little to stop,” she said.”

“Reforming competition policy is crucial to ensure Australia remains a place where small businesses can grow and thrive – a place where people can bring their entrepreneurial ideas to life and be their own boss as an alternative to working under the CEO of a big, monopolistic company.”

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