Australian Prime Minister Anthony Albanese at the National Press Club today.
AUSTRALIAN Prime Minister Anthony Albanese has bowed to industry and political pressure to announce an inquiry into supermarket food pricing, including examining the difference between farmgate and retail pricing.
Mr Albanese told the National Press Club today that the treasurer, Jim Chalmers, will be directing the Australian Competition and Consumer Commission to conduct a 12-month price inquiry into the supermarket industry.
“The ACCC has significant powers and it is the best and most effective body to investigate supermarket prices,” he said.
“To look at how things like online shopping, loyalty programs and changes in technology are impacting competition in the industry.
“And to examine the difference between the price paid at the farm gate and the prices that people are paying at the checkout,” Mr Albanese said.
“For me, it’s this simple.
“When farmers are selling their product for less, supermarkets should be charging Australians at the checkout less.”
Mr Albanese said the Federal Government would also fund the consumer organisation Choice to provide shoppers with a clear understanding of how supermarkets are performing “on this score.”
“Because thousands of products it can be hard for people to find the best deal.
“We are backing Choice, renowned for their commitment to consumer fairness to provide clear and regular information on prices across a basket of good,” Mr Albanese said.
“This will promote transparency, enhance competition and drive value.
“These actions send a very clear message: our government is prepared to take action to make sure that Australians are not paying none dollar more than they should for the things that they need.”
Labor shamed into ACCC inquiry – Littleproud
Leader of The Nationals David Littleproud welcomed the announcement of an ACCC supermarket inquiry into pricing, but claimed the Labor Government had to be shamed into calling it, after ignoring warnings and support to act on supermarkets for more than 12 months.
Mr Littleproud had been calling for the ACCC to be directed to investigate the clear evidence of meat and fresh produce price disparity between the farmgate and the checkout prices since November 2023 and offered the government support to introduce big stick legislation as early as December 2022.
“Labor could have started the ACCC investigation before Christmas but didn’t understand the scale nor severity of their cost-of-living crisis,” Mr Littleproud said.
“The ACCC has the powers to properly investigate as part of a dedicated inquiry to ensure fairness for farmers and consumers and it’s only because they’ve been shamed into action that the government has acted.
“Under section 95, the Treasurer has the legislated power to direct the ACCC and give it strong powers to compel witnesses and recommend harsher penalties,” he said.
“While Labor spent last year distracted on a $450 million failed Voice Referendum, price disparity between the farmgate and the supermarket checkout was allowed to escalate out of control.
“The Nationals wanted this investigation urgently before Christmas but Labor was simply too slow to take action and in fact said that the Grocery Code of Conduct Review was their solution,” Mr Littleproud said.
“It’s unfortunate it took Labor so long to realise that these powers exist, after previously promising Australians that two other inquiries they announced would yield results.”
Mr Littleproud said he had already written to the ACCC, urging it to undertake an inquiry.
The Food and Grocery Code Review is being conducted more than one year after The Nationals urged Labor to bring the review forward.
ACCC announcement:
The ACCC welcomes today’s announcement by the Australian Government that it will direct the ACCC to conduct an inquiry into Australia’s supermarket sector, including the pricing practices of the supermarkets and the relationship between wholesale, including farmgate, and retail prices.
The year-long inquiry will also examine competition in the supermarket sector and how it has changed since the ACCC’s last inquiry in 2008.
“We know grocery prices have become a major concern for the millions of Australians experiencing cost of living pressures,” ACCC Chair Gina Cass-Gottlieb said.
“When it comes to fresh produce, we understand that many farmers are concerned about weak correlation between the price they receive for their produce and the price consumers pay at the checkout.”
“We will use our full range of legal powers to conduct a detailed examination of the supermarket sector, and where we identify problems or opportunities for improvement, we will carefully consider what recommendations we can make to Government,” Ms Cass-Gottlieb said.
Following the ACCC’s 2008 inquiry, Coles and Woolworths provided enforceable undertakings to the ACCC to remove restrictive tenancy provisions that may have prevented shopping centres from leasing space to competing supermarkets. The ACCC’s investigation identified more than 700 potentially restrictive leases.
“Competitive markets encourage more attractive combinations of price and quality for consumers, as well as greater choice,” ACCC Deputy Chair Mick Keogh said.
“Our inquiry will examine the nature of the current competitive environment between supermarkets, as well as the barriers to greater competition and new entry in the sector.”
“We believe we are well placed to conduct this broad-ranging inquiry and will bring to bear our expertise in competition, consumer law, agriculture and the supermarket sector in particular,” Mr Keogh said.
The inquiry will also look at any emerging issues related to more recent trends, including online shopping, changes in technology, and loyalty programs.
The ACCC expects to publish an issues paper in February seeking views on the key issues it will consider in this inquiry. An interim report will be provided to the Australian Government later this year, and the final report is due to be provided early next year.
The ACCC will publish the formal direction from the Australian Government, including the terms of reference, when it receives it.
Background
Under Part VIIA of the Competition and Consumer Act, the Treasurer can direct the ACCC to hold a price inquiry into a particular matter.
Such an inquiry allows the ACCC to use its compulsory information-gathering powers to collect information from the relevant parties subject to the inquiry.
The ACCC’s inquiry into the supermarket sector is separate to the Government’s recently announced review of the Food and Grocery Code of Conduct, which relates to the conduct of retailers and wholesalers towards suppliers.
The ACCC currently has a role in promoting compliance with the voluntary Food and Grocery Code, and will be actively contributing to this review of the Code.
The ACCC recently indicated that it has been closely considering reports from consumers alleging false or misleading “was/now” or other pricing “specials” advertised by the supermarkets, and whether they may raise concerns under the Australian Consumer Law. The ACCC’s assessments are ongoing and are entirely separate from this new inquiry into the supermarket sector.
For updates, visit the Supermarket sector inquiry 2024-25.
Paul Keating had a name for people that break promises… Sc#* Bags!
Some of my info indicates the supermakets are running at fair(ish) profit margins, they are businesses after all.
What irks me is the so-called official figure of 7.3% inflation! This is completely bogus… more like 10+%.
December rises… Chocolate +17%, biscuits/chips 13-20%, meat and dairy +11%… a special gift the Wholesalers gave us for Christmas…
The accc is not going to look at Wholesalers… and why? GST!
Pointless gov garbage again!!!!!