The recent interventionist policy enacted by ACT chief Minister John Stanhope represents a gross misunderstanding of the nature of competition. It will result in nothing more than higher prices for consumers to protect a small minority of businesses. The only reason independent retailers fail to succeed is, quite simply, because they are not profitable enough to stay open. Whether this is because they are not efficient enough due to poor economies of scale, labour costs, or some other reason is irrelevant.

Funnily enough, "...the architect of the ACT policy is John Martin, who was a long time commissioner at the Australian Competition and Consumer Commission with special responsibility for small business." So a man with a vested interest in helping out a particular lobby group, small business, is using his coercive powers in government to impose legislation that consumers do not want. Why does this not surprise me? Apparently, "...Mr Stanhope is turning the ACT into a test bed for interventionist polices aimed at improving competition policy." In other words, he is using flawed logic of 'more firms = more competition = lower prices' to justify his intervention.

As long as the government stays out of the way, which also includes not providing favours to the big three retailers, a free market dominated by a few firms is not a bad thing. The cheaper prices provided by Woolworths, Coles and IGA provide everyone in the economy with additional income to spend elsewhere (the savings they now make they can use to acquire more goods than they could before). This savings will then be spent in other areas of the economy enabling everyone to gain additional products and will also create jobs in the process.

If people honestly wanted to support small retailers, they would vote with their wallets. The minister should remove the intervention and let the people speak through their own actions rather than using the strong arm of government to impose his views on others. The big three cannot charge monopoly prices without illegal coercion (bribes, intimidation, etc), government-created barriers to entry (regulation, etc) or other government involvement (political favours, subsidies, etc). The only way they can keep competition out and then maintain their position is by improving their products and/or narrowing their profit margin to the point that competitors cannot enter.

To me, that sounds like a win for everyone involved, unless of course you're a small business lobby group or a politician handing out and receiving favours.