00:00A few decades ago if you have a dog or a cat and you wanted to buy some toys for them or
00:07some dried food, you might head on down to a small retail store.
00:12Today pet retail is dominated by two major players.
00:16You have pet stock which is owned by Woolworths partially and you have Pet Barn which is owned
00:22by a US equity fund.
00:25Now small pet retailers that are still in the market and lots of them have been gobbled
00:30up by these big players.
00:32The small ones remaining say that they're finding it really hard to compete with these
00:37big companies on things like price or their loyalty programs.
00:41And it's not just pet retail where you've had massive companies come significantly into
00:45the market.
00:47We have hardware for instance now dominated by major player Bunnings as well as its rival
00:55Mitre 10 which is owned by Metcash.
00:59So the Senate inquiry's terms of reference make it clear that they are looking at retailers
01:03like Bunnings and other large format stores that could rope in all sorts of names such
01:08as Ikea which has already made a submission or Dan Murphy's which has also supplied one.
01:14In terms of what this inquiry will achieve we know that the retail bosses will have to
01:19be forced to front it and that could continue to damage their brands.
01:24In terms of deliverables we have already had the Federal Government rule out divestiture
01:29powers that could split up companies that have gotten too powerful.
01:34We already have the Feds talking about bringing in increased powers for the ACCC when it comes
01:39to stopping mergers.
01:41In fact just this morning we've had the Federal Treasurer and the ACCC speak about these looming
01:47new powers.
01:48Here is the ACCC speaking.
01:50Pet stock amassed the second largest chain of pet products across Australia with no notification
01:58whatsoever to the ACCC.
02:00We saw it when a large listed company, Woolworths, notified it to take a shareholding in it.
02:07In order to proceed with that transaction we required divestitures in 40 communities
02:14across Australia to return competition and lower price.
02:18That's an example but we have examples in cancer radiology, pathology, supermarket acquisitions,
02:25petrol station acquisitions, liquor store acquisitions.
02:29That's the ACCC talking about some new powers that they're expecting in terms of merger
02:34laws and certainly there'll be more focus here on major sectors that have accumulated
02:40too much market power.
