Supermarkets Push Back Against Price Gouging Claims

Fred Harrison, CEO of Ritchies supermarkets, expressed frustration over Prime Minister Anthony Albanese’s recent comments accusing supermarkets of “price gouging.” With over 50 years in the industry, Harrison believes such claims unfairly tarnish the sector and cause unnecessary stress for supermarket employees.

Supermarkets, he argues, have become an easy target. He insists that Ritchies, like many other grocers, operates on modest margins and works hard to stay competitive. The accusations, he says, mislead the public into believing they are being exploited, despite the Australian Competition & Consumer Commission (ACCC) finding no evidence of price gouging in its recent investigation.

The government has pledged to impose heavy fines on supermarkets found guilty of gouging, a move that caught major retailers by surprise. Woolworths and Coles responded by stating that a year-long ACCC inquiry found no evidence to support these claims. Coles emphasised that rising costs in energy, fuel, wages, and logistics—not supermarket pricing strategies—are driving grocery prices higher.

Harrison pointed to the ACCC’s 441-page report as evidence that supermarkets are not engaged in price gouging. He is disheartened by ongoing criticism, noting that supermarkets provide essential services without surcharges, even on public holidays. He also highlighted that grocery manufacturers, not retailers, are responsible for many price increases due to rising production costs.

Former ACCC chair Allan Fels, who has examined pricing across industries, acknowledged that proving excessive pricing is complex. He defines it as charging significantly above costs and a reasonable profit in an uncompetitive market. While his report for the ACTU found no evidence of profit gouging, he has recommended stronger legislation to regulate excessive pricing, based on European and UK laws. He also suggested the ACCC conduct deeper investigations and consider introducing divestiture laws similar to those in the US.

The federal opposition and Greens support breaking up major supermarket chains if they are found misusing their market power. Fels noted that an ongoing ACCC case against Woolworths and Coles regarding misleading discounting could potentially constitute price gouging if proven.

Meanwhile, JP Morgan analyst Bryan Raymond reported that the price gap between Woolworths and Aldi narrowed to 7.8% in March, down from 8.4% in February—the lowest in two years. Coles’ price premium also fell to 8.5% from 9.2% the previous month. He suggested these price adjustments reflect efforts by major supermarkets to address value perception ahead of the ACCC’s final report and the federal election.

As the debate continues, Harrison maintains that supermarkets are being unfairly scapegoated. While affordability remains a concern for consumers, he argues that grocery prices are influenced by broader economic factors rather than deliberate price manipulation by retailers.

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