Coles cleared of predatory pricing in Australia

Monday, October 3, 2011

Australia's Competition and Consumer Commission has ruled that Coles, with 741 stores the second-largest grocery chain in Australia, was neither breaching competition rules nor employing predatory pricing practices when it slashed the price of its house brand milk to $1 a litre earlier this year.

To the contrary, chair Graeme Samuel ruled that price reductions benefited consumers. Less happy, according to the Sydney Morning Herald, were dairy farmers fearful for the future of their industry and the rural politicians who represented them.

"On the evidence we've gathered over the last six months it seems most milk processors pay the same farm gate price to dairy farmers, irrespective of whether it is intended to be sold as branded or house brand milk," Samuel said.

Coles has 35 per cent of the Australian grocery and liquor market, behind Woolworths Supermarkets with 40 per cent, according to the Herald in 2007. Ironically, Coles started in 1914 as a farm co-op. BF