Australia watchdog to boost grocery competition

MELBOURNE, July 14 (Reuters) - Australia's competition watchdog wants to make it easier for competitors to enter the supermarket market, its chairman said on Monday, in a challenge to the duopoly of Wesfarmers Ltd (WES.AX) and Woolworths Ltd.

The Australian Competition and Consumer Commission (ACCC) is due to report the findings of its inquiry into high grocery prices by the end of this month.

Wesfarmers, which owns the Coles chain of supermarkets, and Woolworths combined have a grocery market share of some 80 percent, and the inquiry has been told rivals trying to open stores face tough restrictions on new entrants.

ACCC Chairman Graeme Samuel said the grocery industry did not have vigorous enough competition.

"How do you remedy it? Well, what you do is you ensure that there are as low as possible barriers to entry on the part of new competitors and existing competitors expanding their business operations," Samuel said.

"I think they're the things that we'll be addressing in our grocery report," he told Australian Broadcasting Corp radio.

Rivals to Woolworths and Wesfarmers say they have been blocked from opening stores near existing supermarkets because of agreements between shopping-centre owners and the big two players.

In some cases, rents charged to the big two would be halved if a competitor opened a store in the same shopping centre.

Smaller rival Metcash Ltd (MTS.AX), which supplies independent grocers, privately owned Aldi and Franklins (PIKJ.J) have all made similar complaints to the inquiry about access.

($1=A$1.03) (Reporting by Victoria Thieberger; editing by Mark Bendeich)