Bombshell probe into supermarket prices

The 12-month probe, which can carried out by the Australian Competition and Consumer Consumer Commission (ACCC), will look at whether or not supermarkets have used their market energy to broaden their income, and strain customers, farmers and suppliers to bolster their backside line.

Woolworths, the nation’s largest grocery store chain, along with its major competitor Coles, make up two-thirds of Australia’s meals and grocery market.

Both corporations have often defended their pricing, claiming they too are affected by value pressures from suppliers and their workforce.

The adjustments had been introduced alongside a broader value of residing reduction package deal, which included an overhaul of the contentious stage 3 tax cuts, by Prime Minister Anthony Albanese at an tackle to the National Press Club on Thursday.

“The ACCC has significant powers – and it is the best and most effective body to investigate supermarket prices,” Mr Albanese mentioned in his first main tackle of 2024.

The grocery store business may also be topic to a Greens-led parliamentary inquiry, as strain grows on the sector which has recorded near-record income, whereas customers battle amid the continued inflation crunch.

In a press release, the National Farmers Federation welcomed the competitors watchdog inquiry, saying it was “good news” for individuals who have “long called for greater transparency from the big retailers”.

“It’s appropriate the ACCC lead this inquiry, using its powers to compel information to form a clear picture of paddock to plate pricing and whether that’s fair for both farmers and consumers,” president David Jochinke.

But he confused the federal government couldn’t let the report simply “collect dust” when it’s handed again subsequent yr.

“Reports and recommendations don’t make our food system fairer. We need sustained political leadership and action,” Mr Jochinke mentioned.

Former Labor competitors minister Craig Emerson can also be inspecting the connection between retailers and suppliers by way of a assessment of the Food and Grocery Code of Conduct.

The inquiry will examine the business’s present construction, competitiveness of small retailers, pricing practices and the sector’s provide chains.

Online purchasing, loyalty applications and the way technological change has affected competitors within the business, may also be scrutinised.

Amid accusations that decrease costs paid by retailers on the farm gate aren’t flowing by way of to closing costs, the ACCC may also be directed to scrutinise whether or not customers and first producers are receiving a good deal.

“When farmers are selling their product for less, supermarkets should charge Australians less,” Mr Albanese.

An interim report can be launched by the competitors watchdog this yr, with closing suggestions to be launched in early 2025.

Under Australian client legislation, excessive grocery costs are solely prohibited by competitors legislation when there’s illegal communication between the events to co-ordinate pricing.

The authorities additionally unveiled $1.1m funding injection for client advocacy organisation Choice to supply clear and common info on costs in Australian grocery store retailers, commencing within the June quarter.

“Across thousands of products it can be hard for people to find the best deal,” Mr Albanese mentioned, including that the funding would promote “transparency, enhance competition and drive value.”

“This will promote transparency, enhance competition and drive value.”

Originally revealed as Competition watchdog to probe supermarkets amid value gouging accusations