Australian Prime Minister Anthony Albanese has bowed to industry and political pressure by announcing an investigation into supermarket food pricing, which will include a comparison of farmgate and retail prices.
Mr Albanese informed the National Press Club today that Treasurer Jim Chalmers will direct the Australian Competition and Consumer Commission to conduct a 12-month price enquiry 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 stated that the Federal Government would also fund the consumer organisation Choice to provide shoppers with a clear understanding of how supermarkets perform "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.”
David Littleproud, Leader of The Nationals, welcomed the announcement of an ACCC supermarket pricing enquiry, but said the Labour Government had to be shamed into calling it after ignoring warnings and support to act on supermarkets for more than a year.
Since November 2023, Mr Littleproud has been calling for the ACCC to investigate the clear evidence of meat and fresh produce price disparities between farmgate and checkout prices, and he has offered the government his 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 stated that he had already written to the ACCC, urging it to conduct an enquiry.
The Food and Grocery Code Review is taking place more than a year after The Nationals urged Labour to move the review forward.
The Australian Competition and Consumer Commission (ACCC) welcomes the Australian Government's announcement today that it will direct the ACCC to conduct an enquiry into Australia's supermarket sector, including supermarket pricing practices and the relationship between wholesale, farmgate, and retail prices.
The year-long investigation will also look at competition in the supermarket sector and how it has changed since the ACCC's last enquiry 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 investigation will also look into any emerging issues concerning more recent trends, such as online shopping, technological advancements, and loyalty programmes.
The ACCC plans to release an issues paper in February soliciting feedback on the key issues that will be addressed in this enquiry. The Australian Government will receive an interim report later this year, with the final report expected early next year.
When the ACCC receives formal direction from the Australian Government, it will publish it, along with the terms of reference.
Background
Under Part VIIA of the Competition and Consumer Act, the Treasurer has the authority to direct the ACCC to conduct a price enquiry into a specific matter.
Such an enquiry allows the ACCC to use its mandatory information-gathering powers to obtain information from the parties involved.
The ACCC's investigation into the supermarket sector is distinct from the Government's recently announced review of the Food and Grocery Code of Conduct, which addresses the behaviour of retailers and wholesalers towards suppliers.
The ACCC is currently responsible for promoting compliance with the voluntary Food and Grocery Code and will actively contribute to its review.
The ACCC recently stated that it is carefully reviewing consumer reports alleging false or misleading "was/now" or other pricing "specials" advertised by supermarkets, and whether they may raise concerns under Australian Consumer Law. The ACCC's investigations are ongoing and separate from the new supermarket enquiry.
(Source: Beef Central )
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