Metcash CEO Doug Jones has criticised the Albanese government for its stance on the supermarket industry, arguing that accusations of price gouging are baseless and politically motivated. He condemned the use of “inflammatory language” designed to sway voters and called it a “gross oversimplification” of supermarket operations.
Jones took issue with Prime Minister Anthony Albanese’s suggestion that supermarkets could face heavy penalties for profiteering, stating that this disregards the struggles of family-owned businesses, which have remained resilient through crises such as the Queensland floods and the COVID-19 pandemic.
As head of Metcash, a wholesaler supplying 2,450 independent supermarkets under brands like IGA and 80,000 convenience stores and food outlets, Jones emphasised that multiple inquiries, including one by the competition regulator, have found no evidence of excessive profiteering. He criticised the term “price gouging” as a misleading political slogan.
Reducing the debate to such accusations, he argued, was not only misleading but also disrespectful to independent supermarkets, many of which serve rural and regional communities. He warned that unfairly targeting these businesses could create unnecessary divisions.
Jones highlighted that during the pandemic and the Queensland floods, independent supermarkets played a crucial role in keeping their doors open when many others remained shut. He argued that these stores are deeply embedded in their communities and do not exploit consumers.
He called for a more informed discussion on the issue, given that the Australian Competition & Consumer Commission (ACCC) found no evidence of wrongdoing by major supermarket chains. Jones criticised the government for continuing to make accusations despite the ACCC’s 441-page report refuting claims of price gouging.
His views were echoed by Ritchies CEO Fred Harrison, who rejected claims that supermarkets were exploiting consumers. Harrison, with 50 years in the industry, stated that supermarkets work hard to remain competitive while maintaining modest profitability. He argued that the continued use of terms like “profit gouging” fuels unnecessary hostility towards the industry and misrepresents the facts.
When asked to define price gouging, Albanese responded that it was when supermarkets were “taking the piss” out of consumers. This remark angered supermarket executives, as the ACCC had made no recommendations regarding price gouging just a week earlier. Coles and Woolworths responded by stating that the ACCC’s findings confirmed no evidence of gouging.
Jones pointed out that the financial structure of independent supermarkets often involves selling some products at a loss or with very slim profit margins. He stressed that this complexity is lost in the current debate.
Metcash and independent retailers, he explained, use sophisticated pricing strategies to compete with the major chains, including offering tailored product ranges and personalised service. He argued that pricing practices vary, with some products sold below cost, and suggested that misunderstanding this complexity fuels the false narrative of profiteering.
Jones urged for a more nuanced approach in discussing supermarket pricing, emphasising that competition extends beyond price alone. He reiterated that the industry must provide value to customers or risk losing them.
The ACCC report concluded that there was no simple solution to counteract the dominance of Coles and Woolworths but recommended improvements in pricing transparency, better protections for suppliers, and planning and zoning law reforms. It made no findings of wrongdoing or recommendations for breaking up the major chains.
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