Chalmers’ merger shake-up slams brakes on supermarket takeovers

Every plan by a supermarket to take over part of the operation of another will face scrutiny from the competition regulator under federal government plans to deliver the biggest overhaul to merger laws in half a century.

Treasurer Jim Chalmers will on Thursday introduce legislation to streamline key aspects of the merger system but also tighten it so that more acquisitions are investigated to ensure they do not reduce competition.

The government has ramped up its attacks on the supermarket sector after the Australian Competition and Consumer Commission (ACCC) started action against Coles and Woolworths alleging the companies misled shoppers with their “Down Down” and “Prices Dropped” campaigns.

Chalmers will argue the merger reforms will boost competition and productivity across the economy, delivering benefits direct to consumers and businesses.

He said while not every merger would not be captured under the government’s new system, the supermarket sector would be.

“We want to make sure supermarket mergers don’t come at the cost of Australians, families and pensioners getting a fair price on their grocery bills,” he will tell parliament.

A set of thresholds will be introduced, above which companies will have to tell the ACCC of their intention to merge, which will be reported on a public register.

The ACCC will investigate any merger involving a large business with a turnover of more than $500 million buying a smaller business or assets with domestic turnover of more than $10 million.