Coles CEO Leah Weckert has highlighted the intense competition in Australia’s $120bn supermarket industry as it awaits a major regulatory review.
Speaking at The Australian’s Global Food Forum, Ms Weckert suggested the Australian Competition and Consumer Commission (ACCC) report—expected soon—could introduce stricter regulations. These may focus on greater transparency in supplier contracts, particularly pricing and supply volumes, as well as improved signage for packaging size and shelf price changes.
Visy chairman Anthony Pratt noted Australia’s food exports have doubled to $60bn annually, with 70 per cent of farm production reaching 169 countries. The Australian’s editor-in-chief Michelle Gunn emphasised the importance of strong government policy to address industry challenges, including supply risks, rising costs, regulatory burdens, climate change, and energy transitions.
Balancing Regulation and Competition
Ms Weckert warned that excessive regulation could hinder productivity and add costs that would ultimately be passed to consumers and producers. The ACCC’s final report is now with Federal Treasurer Jim Chalmers, raising concerns that supermarkets could become political targets in an election campaign centred on cost-of-living pressures.
Having testified at the ACCC’s public hearings, Ms Weckert reaffirmed that Coles operates in a fiercely contested market, competing not only with Woolworths and Metcash but also with major global retailers such as Aldi, Costco, and Amazon, all of which rank among the world’s top 10 retailers. She stressed that these international players have significantly strengthened their presence in Australia over the past 15 years.
Coles and Woolworths have argued that the sector remains highly competitive, though it remains uncertain whether regulators and the government will share this view.
Anticipated Changes in Regulation
Ms Weckert expects supplier relationships to be a key focus in the ACCC’s recommendations, particularly in the fresh produce sector. Farmers and suppliers have frequently raised concerns about unclear contractual agreements on pricing and supply commitments.
A preliminary ACCC report in 2024 highlighted that Australia’s supermarket sector is heavily concentrated, with many consumers feeling disadvantaged without access to loyalty discounts or membership pricing.
Ms Weckert also anticipates new rules around price transparency and packaging changes, particularly regarding “shrinkflation,” where product sizes reduce while prices remain unchanged. She suggested there could be recommendations for clearer signage to inform customers when a product has undergone shrinkflation, as well as potential mandates for minimum font sizes in pricing and online price publishing to help shoppers compare prices across retailers.
With the ACCC’s findings imminent, the supermarket sector faces the likelihood of increased scrutiny and tighter regulation, raising questions about how both retailers and consumers will be affected.
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