What Are Examples of Monopolistic Listed Companies in Australia?

In Australia, the Australian Competition and Consumer Commission (ACCC) is in place to protect competition, while the Australian Securities and Investments Commission (ASIC) enforces competition laws. Many leading companies on the ASX resemble the characteristics and industry effects of monopolistic competition. Accordingly, these companies must adhere to regulations to ensure that there are no anti-competitive practices taking place and that all participants in the market have an equal opportunity to succeed.

Mining and Metals

In the Mining and Metals sector, both BHP Group (BHP) and Rio Tinto (RIO) may not be direct monopolies but possess the features of bordering monopolies. While RIO and BHP have a significant market share and presence on the ASX, neither has exclusive control over the industry. Various other companies offer similar services and products, so neither RIO nor BHP, are outright monopolies. Moreover, neither BHP or RIO have exclusive control over the commodities or services they produce, meaning their dominance in the industry does not constitute a monopoly.

Food Processing and Distribution

GrainCorp (GNC) is a major player in the grains supply chain and provides handling, storage, transport and marketing solutions for farmers and commercial customers. It also manufactures and markets a range of grain-based products such as malt, flour, and animal feed. GNC is the largest grain handler in Australia and New Zealand and in 2021 was estimated to control 40-50% of grain production and 30% of Australia’s and New Zealand's domestic demand. While there has been increased competition from smaller local players in recent years due to the deregulation of the grain and wheat industries, GNC has still established major barriers to entry in Australia and New Zealand.

Supermarkets

Australia's supermarket monopoly has been the source of much debate. The four major companies (Woolworths Group (WOW), Coles Group (COL), Aldi and IGA) dominate over 85% of supermarkets and grocery stores in the country. Most Notably, Australia’s supermarket monopoly is largely controlled by two major companies, COL and WOW. Together they own 70% of the market share, leaving little chance for smaller competitors to survive. As a result, Australians have limited choice in terms of quality and prices when it comes to groceries. Furthermore, the power held by these two supermarket giants has allowed them to determine the terms of suppliers, impacting the cost of food in Australia. The supermarket monopoly has caused prices to remain artificially high for customers, questing the need for a reform to the supermarket industry in Australia. 

Aviation

Qantas Airways (QAN) has held a near-monopoly within the Australian domestic market since its inception in 1920 as Australia’s national carrier. QAN monopoly extends to both passenger and freight services, with QAN controlling around 70% of the total market share in domestic air travel. The airline has been able to maintain its dominant position through a combination of government regulation, network effects and economies of scale. The federal government frequently provides financial support during periods of duress, such as during the GFC, COVID-19 and after 9/11. In addition, QAN takes advantage of its large size by purchasing fuel and other inputs in bulk at cheaper prices. The company has also developed a brand loyalty, with customers preferring its services over competitors like Virgin due to its long-standing reputation for safety and reliability.