Prime Minister Anthony Albanese has invited Emirati retailer LuLu Group to establish operations in Australia, positioning the company to compete with major supermarket chains Coles and Woolworths.
Mr Albanese extended the invitation to LuLu Hypermarket chairman Yusuff Ali during a visit to the United Arab Emirates, coinciding with the implementation of a new free trade agreement between the two countries. "One of the great things about the [LuLu Group] chairman's company, there are 300 supermarkets just like this one, I have encouraged him to come to Australia as well," Albanese said. "I have encouraged him to come to Australia as well. We need more competition in the Australian supermarket sector, and we have had a little discussion about that."
LuLu Hypermarket operates more than 250 outlets across the Gulf states and other markets. Albanese noted that the company has the scale to deal directly with Australian producers. "This company is big enough to have direct relations with [Australian] producers, whether they be mango producers, the orange producers, the meat producers that the chairman met in Mudgee that are still providing Halal-certified meat into this market," he said.
The free trade agreement eliminates tariffs on nearly all Australian exports to the UAE and is expected to encourage further investment from Emirati sovereign wealth funds into Australia.
The Australian supermarket sector has faced scrutiny over the past term of government, as product price increases have coincided with broader cost-of-living pressures. Critics have argued that the concentration of market share between Coles and Woolworths reduces competition and distorts pricing.
Both the Greens and the Nationals have previously supported the idea of introducing break-up powers that would allow forced divestment of supermarket assets if anti-competitive behavior were proven. The Coalition has since adopted the policy.
Albanese rejected such measures, stating last year that Australia was "not the old Soviet Union" and that the government would not forcibly break up the major retailers. Instead, the government has pursued measures to increase competition by consulting with states and territories on zoning and planning laws to make more sites available for new entrants.
Foreign competitors have argued that access to the market has been restricted by existing chains purchasing sites without developing them.
In March, the competition watchdog concluded that Coles and Woolworths had "limited incentive" to compete on price due to market dominance, though it found no evidence of excessive price rises. Shortly afterward, Albanese committed to exploring an "excessive pricing regime" that would allow penalties for price gouging.
Source: ABC News