Wesfarmers says breaking up business would be detrimental to Australia
SYDNEY, May 7 (Reuters) -Australia's Wesfarmers WES.AX said on Tuesday any move to break up its budget department store chain Kmart, hardware business Bunnings and chemicals maker WesCEF would drive up prices and put Australian businesses at a global disadvantage.
An Australian senate inquiry is considering whether to introduce laws making it easier for the competition regulator to make large retailers sell assets.
"Any breakup would only do two things: it would put our businesses, Australian businesses, at a distinct competitive disadvantage against some very large global juggernauts of the likes of Amazon and Costco," CEO Rob Scott said during the Macquarie Australia conference.
"Secondly, what would happen, particularly in a lot of regional areas, you'd see prices go up."
Australia's Greens party has been pushing to break up the country's grocery giants Woolworths WOW.AX and Coles COL.AX alleging the companies made the cost of living crisis in the country worse by inflating prices.
Woolworths and Coles denied price gouging and have opposed the breakup proposal, saying the move would put them at a disadvantage to foreign rivals. Both retailers told a Senate inquiry in March that Australia's grocery sector was highly competitive with some of the lowest profit margins in the world.
Wesfarmers, which also owns pharmacies, an office supplies chain and a lithium mine, has not come under the radar yet. The country's biggest listed conglomerate has grown most of its profit in the past by riding a property and renovation boom at its market-dominating hardware chain Bunnings.
Reporting by Byron Kaye; Writing by Renju Jose; Editing by Christopher Cushing
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