Monopolistic pricing power – to be reigned in?
Earlier this week, the Australian Competition and Consumer Commission (ACCC) commented on the Harper Competition Review Draft Report. ACCC Chairman, Rod Sims, said: “The draft report is part of the most significant review in this area for over 20 years”.
The panel has come up with a package of refinements to the Competition and Consumer Act (2010), which are intended to ensure that Australian’s competition law continues to be effective and efficient in making markets work for the benefit of consumers.
It will be interesting to see whether the Review eventually gives the ACCC additional powers to deal with those companies which “abuse” their monopolistic or oligopolistic pricing power.
Investors should watch this space closely.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Chris B
:
There is too much red tape and propoganda in our laws. It is widely suspected that Coles and Woolies could be abusing market power. Every Tom, Dick and Harry thinks that. But our laws have managed to tie legislators hands behind our back because it might discriminate. Coles and Woolies are not breaking the law, they do seem to be sailing close to the wind.
I believe it is much more debatable whether the big 4 banks have too much market power. There is quite a bit of competition in home loans, term deposits, savings accounts and various other financial products and services. But on the other hand, the big 4 own something like 80% of all bank assets.
It isn’t so clear cut in banks. But it is pretty clear that Coles and Woolies have too much market share.
Roger Montgomery
:
Hi Chris,
To assess the level of competition in banking don’t look at mortgage rates – look to banking services. $35 for an RTGS transfer? C’mon!