The Australian Competition and Consumer Commission (ACCC) has taken a firm stance in the ongoing debate regarding the market influence and pricing strategies of major supermarket chains Woolworths and Coles. In a submission to the Greens-led Senate inquiry, the ACCC advocates for the implementation of measures to address unfair trading practices and a reform of current merger laws.
As consumer complaints regarding high prices and misleading advertising soar, the ACCC stresses the need for a comprehensive prohibition on unfair trading practices across all sectors of the economy. Such measures, it argues, will set a higher standard for business conduct and ensure fairer market practices, including in the financial services industry.
The ACCC’s submission to the Senate inquiry, spanning 18 pages, underscores the urgency of addressing concerns related to price gouging and the misuse of market power by supermarket giants. Reports of inflated prices, deceptive advertising, and tactics like “shrinkflation” have prompted heightened scrutiny.
The upcoming Senate inquiry, expected to commence next month, will grill industry leaders, including outgoing Woolworths CEO Brad Banducci and Coles CEO Leah Weckert. This inquiry dovetails with the ACCC’s own review of the supermarket sector, led by Chair Gina Cass-Gottlieb.
The ACCC’s call for regulatory reforms aligns with growing public and political pressure on supermarkets, as evidenced by recent events such as Banducci’s tumultuous interview on ABC’s Four Corners and his subsequent retirement announcement. The government’s decision to support a Senate inquiry, initiated by the Greens, underscores the gravity of the situation.
Key proposals from the ACCC include the introduction of a prohibition on unfair trading practices and revisions to merger laws, particularly to address what it terms “serial acquisitions” by supermarket giants. These acquisitions have bolstered the dominance of Woolworths and Coles in the market.
Additionally, the ACCC advocates for making the voluntary food and grocery code of conduct mandatory to enhance its effectiveness in governing the relationship between supermarkets and suppliers. By strengthening regulatory oversight and promoting fair competition, these measures aim to ensure greater transparency and fairness in the supermarket sector and beyond.
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