Woolworths has refused to sign a voluntary notification code put forward by the Australian Competition and Consumer Commission (ACCC) in an effort to halt creeping acquisitions and the dominance of the chains, according to the Master Grocers Australia (MGA).

The proposed code comes in response to the MGA’s report into the power of the duopoly in the Australian supermarket industry, released in September.

Coles has agreed to a six month trial period.

Jos de Bruin, CEO of MGA said that any hopes the MGA had of a sensible voluntary arrangement being put in place where the chains would work with the ACCC on their expansion plans have been dashed.

“The ACCC might be taking some positive steps to address the issue but there needs to be a greater focus on exactly what the chains are planning. So far neither Woolies nor Coles have had any hesitation about opening new stores within 100m of an existing supermarket and it remains common practice to buy shopping centres that house independent supermarkets and then not renew their leases,” said de Bruin.

MGA suggests that competition law should be amended to include a floor space dominance test which would prevent oversized supermarket developments and encourage competition.

Some  Independent supermarkets that were once sustainable because they were aligned to the size of the community become unprofitable, struggle to survive and closures are inevitable.

It says smaller independent supermarkets are being forced out of business as local communities have been flooded with supermarkets that are too big and not economically justifiable or necessary in smaller communities.