CHOICE responds to announcement of inquiry into retail sector

CHOICE says GST threshold shouldn't be only item on agenda 

CHOICE welcomes the announcement of a Productivity Commission inquiry into the retail sector, saying there are big issues involving the growth of online shopping, competition and the dominance of major chains.

The consumer group says the wide-ranging review, flagged by the Federal Government today, presents a historic opportunity to ensure consumers are able to shop at the most innovative, dynamic and competitive online and in-store retailers.

CHOICE believes the inquiry needs a consumer-focused approach to assessing the impact of many issues, such as the GST-free threshold on purchases from overseas and the effects on Australian bricks and mortar stores.

“We also need to look closely at the concentration of ownership and examine the impact of the major chains’ market power on consumers and smaller retailers,” says CHOICE CEO, Nick Stace.

“The issues are certainly far wider than just the lower of cost of overseas online sales."

CHOICE says the commission should examine:

  • concentration in the retail sector;
  • anti-competitive pressures on smaller operators;
  • exclusive import and distribution arrangements; and 
  • a way to improve online consumer protection such as warranties on overseas purchases.  

"CHOICE also recognises that many small businesses are squeezed between large competitors and suppliers and are under pressure from banks, landlords and franchisors - these issues need to be addressed," says Nick Stace.

The inquiry decision comes after a concerted campaign from larger retailers who argue the current GST threshold for online purchases creates an uneven playing field when it comes to competing with foreign online retailers who don’t charge GST.

But CHOICE argues research suggests that overseas online shopping is driven by a wider range of issues than lower prices alone.

CHOICE will be surveying and talking with consumers during the coming months to get their views on service standards. The information gathered will be presented to the Productivity Commission.

Media Contacts:

• Christopher Zinn, CHOICE Director Campaigns and Communications: 0425 296 442
• Ingrid Just, CHOICE, Media Manager and Spokesperson: 0430 172 669

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