Two leading consumer advocates say the ACT Government's new supermarket policy will curb fast rising grocery prices, so long as independent players can grow quickly enough in the Canberra market.
Choice spokesman Christopher Zinn and University of NSW Associate Professor Frank Zumbo say innovative changes enabling ALDI, Supabarn and Franklins to expand here would force the two supermarket giants, Coles and Woolworths, to lower their prices.
Food prices in Australia have risen 41.3 per cent since the start of 2000, the fastest in the developed world, OECD price data shows, with the blame being directed at Coles and Woolworths.
Mr Zumbo said Coles and Woolworths dominated the ACT more than anywhere else in Australia.
''If the ACT Government is proposing to have a big spike in the number of sites they put up for grabs and encourage ALDI and Supabarn, that would be different, depending how quickly that happened,'' Mr Zumbo said.
He said the Government's competition policy was correct to work on a premise that independent operators would keep Coles, Woolworths and even IGA honest.
''If you are only going to get one or two [new sites] a year, it will take a long time to get a result.
''I urge the ACT to fast track suitable sites. The sooner the release of sites, the sooner ACT residents will get lower grocery prices.''
Chief Minister Jon Stanhope said submissions on potential sites were being investigated.
Franklins managing director Aubrey Zelinsky said the chain, which closed Canberra stores eight years ago, had met with the ACT Government and was interested in four or five shops.
In its experience, Franklins had found that as it opened new shops, competitors cut their prices to keep market share.
Mr Zinn said the policy of making competition an issue in planning considerations was positive and resembled Britain's position.
''It was a brave policy to go out there to say we've got a way of addressing this market concentration, and this is the way we can go ahead,'' he said.
''And do it, by actually intervening in the planning process to encourage others.''
Mr Zumbo said full-line supermarkets such as Franklins and Supabarn were needed to break the Coles-Woolworths duopoly.
''We also need ALDI because the ACCC [Australian Competition and Consumer Commission] evidence is clear, that where there is an ALDI in the market, prices at Coles and Woolworths are lower than they are in markets where there is no ALDI.''
ACCC chairman Graeme Samuel said recently aspects of the new ACT supermarket policy were uncompetitive. Excluding Coles and Woolworths and operators who did not have a minimum of 10 years' trading history was not consistent with opening up competition.
Mr Zumbo said the criticism was not warranted, and reflected professional rivalry between Mr Samuel and the author of the ACT's policy, former ACCC commissioner John Martin.
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