The supermarket inquiry that’s been looking into the practices of Coles, Woolworths and Aldi has released its findings, and hoo boy, they’re not going to like this.
The Greens-led Senate Select Committee on Supermarket Prices has recommended making price-gouging illegal and forcibly breaking up major supermarkets — a.k.a. Coles and Woolworths — if they still engage in dodgy practices.
The latter of this is quite controversial, and pits the Committee against Labor, which opposes divestiture laws.
However, the supermarket inquiry findings say otherwise, with the report stating that “a clear majority of inquiry participants advised that divestiture powers would be an important ‘final step’ in competition regulation, to be drawn upon when all else fails.
“Our findings reveal a disturbing trend of profiteering that hits everyday Australians hard. The monopoly power of major supermarkets has led to unfair pricing, hurting both consumers and suppliers. This needs to stop now,” Greens Senator and Committee Chair Nick Kim said in a statement on X.
“Imagine a market where no company could hike prices unfairly or bully suppliers without facing serious legal consequences.”
The supermarket inquiry report argued that it would essentially be a final straw that can be used to punish supermarkets who abuse their market power.
In terms of naughty supermarket behaviour, the inquiry found that supermarkets were giving suppliers really tight windows to negotiate the prices of perishable goods, which essentially would force them to relent for the sake of not losing their produce.
The supermarket inquiry findings have been a long time coming, as the cost of living in Australia soars. People are skipping meals to afford having both food and a roof over their heads, and with the rental crisis happening simultaneously, things are only becoming more dire.
The inquiry seeks to prevent major retailers like Woolworths and Coles from profiting off the cost of living crisis, and make groceries affordable again.
“Making price gouging illegal would give the ACCC the power to take companies to court when price gouging occurs, and give the courts strong punitive powers,” McKim said.
The full list of recommendations for the Australian Government from the supermarket inquiry:
- Amend the Competition and Consumer Act 2010 to create divestiture powers specific to supermarkets.
- Amend section 46 of the the Competition and Consumer Act 2010 to ban price-gouging.
- Establish a Commission on Prices and Competition to examine the “high prices” supermarkets have been setting, with authority to conduct investigations, access supermarket’s historical pricing and profits data, and refer supermarkets to the ACCC.
- Allow the ACCC to investigate and prosecute dodgy trading practices
- Make the Food and Grocery Code of Conduct mandatory, enforceable and protective of suppliers (essentially, close up any loopholes).
- Include green industries and any large retailer that stocks food in the code.
- Implement merger reforms to ensure competitiveness and viability.
- Give ACCC powers to investigate and make recommendations regarding land banking in the supermarket sector.
- Amend the Unit Pricing Code under the Competition and Consumer Act 2010 so that supermarkets must have a mandatory standard for pricing, use standardised terms for discounts and sales to avoid confusion, and disclose any changes in price/size of products (like shrinkflation). Make it so ACCC can enforce this code.
- Increase ACCC’s funding and legislative powers
- Update the 2017 National Food Waste Strategy to include a better approach to addressing food waste, which considers a better use of use-by dates, unrealistic cosmetic standards for produce, and require supermarkets to share data on how much food they waste.
- Improve health and safety of supermarket workers (especially regarding customer abuse)
- Refer the role of multinational food companies in terms of power and price setting for an inquiry by the Economics References Committee, with a report by February 2025.
- The Senate is also recommended to refer the role of Australia’s “big box” retailers in price negotiation practices and use of land to the Economics References Committee, also with a report by February 2025.
