Federal Consumer Affairs Minister Chris Bowen says the Federal Government will rush ahead with plans to stop creeping acquisitions in the wake of the collapse of childcare giant ABC Learning.
Federal Consumer Affairs Minister Chris Bowen says the Federal Government will rush ahead with plans to stop creeping acquisitions in the wake of the collapse of childcare giant ABC Learning.
Creeping acquisitions allow big companies to gradually increase their market share by buying a number of smaller rivals. ABC used creeping acquisitions to build its stranglehold on the childcare sector, buying vast numbers of suburban centres to build its network. The tactic is also used by supermarket giants.
“The ABC case has drawn more public attention to the fact, and certainly for those who say there’s no need for creeping acquisition laws, has shown there actually is,” Bowen told The Australian.
The Government is believed to be considering two proposals. Under the first, the ACCC could block an acquisition if could be found to lessen competition when combined with other acquisitions over a certain period of time. Under the second proposal, the ACCC could block companies with substantial market power from making acquisitions that lessen competition.
“Childcare is one area where the failing in the law has been highlighted,” Bowen says.
He wants to have the Government’s preferred position sorted by the end of this year or early next.
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