Competition and Consumer Amendment (Divestiture Powers) Bill 2024: Senator McKim's defeated supermarket divestiture push explained

The short answer

Competition and Consumer Amendment (Divestiture Powers) Bill 2024: Senator McKim's defeated supermarket divestiture push explained

The Competition and Consumer Amendment (Divestiture Powers) Bill 2024 is a private senator's bill introduced by Senator Nick McKim (Greens, Tasmania) on 20 March 2024. It would amend the Competition and Consumer Act 2010 to enable the Federal Court, on application by the ACCC, to give directions for securing a reduction in a corporation's market power or share, where the court is satisfied the corporation has misused its market power or that divestiture would be in the public interest. The bill is currently before the Senate and has not passed. As a private senator's bill, it does not have government backing.

This is a federal system guide. State constitutions, parliaments and local-government laws can allocate comparable functions differently.

The useful question is not only “what is the rule?” but also “who administers it, which document controls it, and when might it change?” That distinction prevents an accurate general explanation from becoming wrong advice in a particular election, chamber or policy setting.

Evidence review

What the bill proposes

The bill is simple in structure. Schedule 1 inserts new divestiture powers into the Competition and Consumer Act 2010. Under the proposed amendments, where a court has found that a corporation with a substantial degree of market power has misused that power in contravention of section 46 of the Act, the ACCC may apply to the court for orders that would reduce the corporation's power in a particular market or its share of that market. The bill explicitly provides that these new powers do not limit the court's existing powers under other sections of the Act.

A distinctive feature is that the court could also exercise these divestiture powers by consent of all parties, even where a misuse of market power has not been formally found under section 46. This consent mechanism would allow negotiated structural remedies without the need for a full contested hearing and finding of contravention.

The bill would commence the day after it receives royal assent. It is short — a single schedule of amendments focused entirely on the divestiture remedy, without broader changes to the ACCC's powers or the competition law framework.

Evidence review

The political context: supermarket prices and market concentration

Senator McKim introduced the bill during an intense period of public and parliamentary focus on supermarket prices and grocery sector competition. The Senate Select Committee on Supermarket Prices was established in late 2023 and was actively inquiring when the bill was referred to it on 27 March 2024. The committee, chaired by Senator McKim, examined the bill as part of its broader inquiry into supermarket pricing and reported on 7 May 2024.

Australia's supermarket sector is among the most concentrated in the developed world, with Coles and Woolworths together accounting for approximately 65 per cent of the grocery market. Aldi holds around 10 per cent and Metcash-supplied independent retailers (IGA) account for roughly 7 per cent. This market structure has attracted repeated ACCC scrutiny, including the 2024-25 ACCC Supermarkets Inquiry that commenced under a government direction.

Divestiture powers exist in comparable jurisdictions including the United States and the United Kingdom, where competition authorities can seek court-ordered structural separation. Australia's competition law has historically relied on behavioural remedies — court orders about conduct — rather than structural remedies that change market ownership.

Evidence review

The Senate negative and restoration

The bill's most significant parliamentary event occurred on 26 June 2024, when the Senate negatived the second reading. This is a formal vote that the bill not proceed — a stronger rejection than simply allowing a bill to lapse. The negative reflects that a majority of senators voted against the bill's progression, with both major parties — the government and the opposition — opposing it at that time.

Despite this defeat, the bill was restored to the notice paper on 27 August 2025. Restoration to the notice paper is a procedural mechanism that allows a bill to be revived for further consideration, though it does not reset the negative vote. For the bill to progress, the Senate would need to rescind or revisit the earlier negative — a further procedural hurdle that typically requires leave or a successful suspension of standing orders.

Evidence review

The divestiture mechanism: how it would work

The proposed divestiture mechanism operates within the existing framework of section 46 of the Competition and Consumer Act, which prohibits corporations with a substantial degree of market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition.

Under the bill's model, the process would be: first, the ACCC would need to form a view that a corporation has misused market power. The ACCC could then either bring proceedings seeking a court finding of contravention (and subsequently seek divestiture) or negotiate a consent order with the corporation. The court would then determine whether divestiture is an appropriate remedy, considering factors that would include the nature of the market, the impact on competition, and the interests of consumers. The bill does not prescribe a specific divestiture test or detailed factors, leaving significant discretion to the court.

Evidence review

The explanatory memorandum's rationale

The explanatory memorandum frames the bill as adding 'a further legal remedy available where a corporation that has, or is taken to have, a substantial degree of market power has been found to have misused their market power under section 46 of the Act'. The EM is notably brief and does not contain the detailed regulatory impact analysis or statement of compatibility with human rights typically included in government bills, reflecting its origin as a private senator's bill with limited drafting resources.

The EM does not cite specific instances where divestiture would have been appropriate in past Australian cases, nor does it model the economic impact of introducing structural separation powers. These are the sponsor's claims about what the bill would achieve, not independently verified outcomes.

Evidence review

What has happened since and what happens next

Since the bill's negative in June 2024, the competition law landscape has evolved. The government's merger reform legislation — which passed parliament in late 2024 — introduced a mandatory merger notification regime and strengthened the ACCC's powers to block anti-competitive acquisitions. The ACCC Supermarkets Inquiry delivered its final report with recommendations on grocery sector competition.

For the bill to progress from its restored position on the notice paper, the Senate would need to either rescind the 26 June 2024 negative vote or suspend standing orders to allow a fresh second-reading debate and vote. Both are unusual procedures. Even if the bill were to pass the Senate, it would need to pass the House of Representatives, where the government holds a majority. The bill's prospects of becoming law in its current form are very low, but it has sustained parliamentary attention on the question of whether Australia's competition toolkit should include structural separation powers.

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