Coalition supermarket divestiture policy sparks Coalition cracks as Shadow Treasurer Angus Taylor stands firm

Shadow treasurer Angus Taylor says conservatives have “always” barracked for small business and consumers, as he defended the Coalition’s new supermarket divestiture policy amid growing discontent within the Liberal Party.

On Tuesday, Mr Taylor was alongside Opposition Leader Peter Dutton and Nationals leader David Littleproud when he announced that if the Coalition won the next election, they would give the competition watchdog a last-resort divestiture lever, in a bid to crack down on the supermarket duopoly and combat price gouging.

Mr Taylor says there would be two major guardrails in place: the forced selling of assets could only occur if divestment could lead to a substantial improvement in competition, and it must also pass a public interest test.

But some within the Liberal Party say the policy is too “interventionist”, “populist”, and a case of “pandering to the Nationals”.

Multiple Liberal sources say the policy goes against their party’s values of free markets, and have raised concerns it will further isolate voters, especially in the seats lost to “teal” independents in 2022.

It’s also prompted Treasurer Jim Chalmers to accuse Mr Taylor and the Liberals of “being rolled” by the Nationals, who have been championing divestiture powers for supermarkets for several months now.

Prime Minister Anthony Albanese on Wednesday quipped that while Robert Menzies had tried to ban the Communist Party back in the ‘50s, the Liberal Party now “want to adopt the Communist Party model” as he labelled the latest policy announcement “super Marxist”.

“They want publicly owned energy through nuclear energy and now they want, one would assume, publicly owned supermarkets. Because if Coles has to sell, guess who will buy it,” Mr Albanese said.

“There’s no credible argument for this policy ... They were in government for a decade and never did it. They wouldn’t even mandate the voluntary code of conduct.”

But Mr Taylor said there was a “conservative tradition in making sure that consumers and small businesses get a fair deal from big business”.

“My masters thesis at Oxford was on the breakup of the pubs by Margaret Thatcher in 1980s Britain,” he told The Nightly.

“So, conservatives have always taken the view that it is incredibly important that small business and consumers get a fair deal. We want big business to succeed … but they need to be aligned with the interests of middle Australia, and the interest of small business people who are working hard every day.

“We are the party that wants to see more approvals to get more development.

“But we also believe that big business has a responsibility, and their most important responsibility is to make sure that customers and suppliers, as well as their employees, get a fair deal and we will always be on the side of that.”

Under the Coalition’s plan, the now-mandatory Food and Grocery Code would be “strengthened”, tougher civil penalties of up to $2 million would be imposed on supermarkets that fail to comply with the code, and a Supermarket Commissioner would be created.

The ACCC would then have the ability to take supermarkets and hardware chains with more than $5b a year turnover to court, in an attempt to force them to divest.

Mr Taylor said the policy, if effected, would have a “real, ripple effect” on prices, pointing to the example of Aldi entering the Australian supermarket system.

“We want to see robust competition, and I think the history of competition in the world is that competition delivers a better outcome for consumers and suppliers,” he said.

Despite both the Coalition and the Greens now pushing Labor on divestiture, Dr Chalmers said the government wouldn’t play ball.

“One of the reasons why the last three big reviews of competition policy haven’t recommended we go down this path is because of the possible unintended consequences,” Dr Chalmers said.

“If you made supermarkets sell, are they allowed to sell to another big rival? Does it mean they close down more stores in local communities? And does that mean less competition, rather than more competition, in local communities?”

Mr Taylor said if Labor wanted to be “on the side of big business, big unions, and big governments, then they should be clear about that with the Australian people”.