This week, the Australian Government released the ACCC’s Supermarkets Inquiry Interim Report, shedding light on the country’s major supermarket chains.
The ACCC is scrutinising all aspects of the supermarket industry, from market dominance and competition to rising prices and tactics like shrinkflation. They’re also examining the buying power of supermarkets and concerns from both consumers and producers.
From February to April 2024, the ACCC received over 80 public submissions and heard from more than 21,000 customers nationwide—the largest consumer survey in their history. They also held roundtable discussions with farmers and wholesalers to understand their struggles with the supermarket supply chains.
While the Interim Report doesn’t yet make any concrete recommendations, a Final Report with findings and actions will be presented to the government in early 2025. The ACCC’s investigation is incredibly thorough, addressing critical concerns like the cost of living, which remains the top issue for Australians as inflation pressures continue. Grocery prices, a fundamental aspect of daily life, are central to this concern.
This follows the ACCC’s recent legal action against Coles and Woolworths for misleading discount pricing on hundreds of products. Additionally, a new mandatory Food and Grocery Code, currently under consultation, aims to impose multi-million-dollar penalties on Aldi, Coles, Woolworths, and Metcash for serious breaches.
In another development, CHOICE released its second government-funded price monitoring report, providing consumers with accurate data on where to find the cheapest groceries. The report, based on visits to 104 stores across the country, revealed that Aldi once again offered the cheapest basket of goods, with prices even dropping since the previous quarter.
Here’s what the report found for the cost of an average basket of groceries:
– Aldi: $50.79 (with or without specials)
– Woolworths: $68.70 (without specials), $68.37 (with specials)
– Coles: $69.91 (without specials), $66.22 (with specials)
– IGA: $78.95 (with specials)
Looking ahead, the next phase of the Supermarkets Inquiry will include hearings with industry leaders in October and November 2024. The ACCC also welcomes further public feedback on key issues raised in the Interim Report, with submissions due by October 18, 2024.
Prime Minister Anthony Albanese stressed the importance of the inquiry, stating, “This is vital work, and we will be reviewing it closely. My government is committed to ensuring Australians pay a fair price at the checkout and that suppliers receive a fair price for their goods. Consumers deserve better than to be misled by supermarkets.”
Assistant Minister for Competition, Andrew Leigh, reinforced this, calling the inquiry the most comprehensive examination of supermarket competition in over 15 years. He highlighted the government’s commitment to improving the grocery sector for both families and farmers, emphasising the need for greater competition to lower prices, boost productivity, and increase choice.
NSW Farmers Principal Economist Samuel Miller echoed these sentiments, pointing out that farmers and families have long suffered under the supermarket duopoly. “Prices are squeezed at the farm gate while they soar at the checkout. These supermarket giants are pushing up their profits, leaving farmers and families to bear the burden.”
Miller noted that farmers have little bargaining power due to the perishability of their products, often being forced to accept lower prices or see their goods go to waste. He urged for tougher penalties and expanded powers for the ACCC to hold the supermarket giants accountable.
While a mandatory Food and Grocery Code is a step in the right direction, Miller believes more is needed to break the stranglehold of these supermarket superpowers. He called for increased price transparency, a prohibition on unfair trading practices across the economy, and new powers to dismantle monopolies in cases of severe misconduct.
“The way supermarkets are treating both farmers and consumers has to stop,” Miller stated. “If we don’t take action, more Australian families will struggle to afford fresh food on their tables.”
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