2024 Supermarket inquiry announced by ACCC

Coles and Woolworths the prime targets of ACCC supermarket inquiry. Image: Creative Commons, Darren.notley

Amid surging concern about the cost of living, the Australian Competition & Consumer Commission announced in January 2024 that it would be conducting an inquiry into Australia’s supermarket sector. The Australian Government had directed the ACCC to hold the supermarket inquiry, to cover pricing practices and the supermarkets’ relationships with wholesalers and primary producers.

Foremost in the firing line are Coles and Woolworths which, between them, have around 65 per cent of the grocery market. Both chains saw their profits increase in the 2022-23 financial year, leading to accusations of price gouging. While shareholders were benefitting, grocery shoppers were paying the price. A January survey found that 62 per cent of Australians cited grocery prices as their major concern. This was the case across Australia and for every age group other than those under 25.

The Australian Bureau of Statistics (ABS) Consumer Price Index showed that price rises peaked in the June quarter of 2023 with dairy goods rising 15.2 per cent and bread and cereals going up 11.2 per cent in 12 months. However, an August 2023 investigation by the ABC found the prices of certain products had increased by much larger percentages – for example, a rise of 30 per cent in the price of tomato sauce at one (unidentified) supermarket. Although the ABS found price increases had moderated by the December 2023 quarter, continuing public concern made it politically prudent for the government to do something – or to be seen to be doing something.

It wasn’t the first time the ACCC had held a supermarket inquiry to assess whether the sector was sufficiently competitive. After its inquiry in 2008,  the Commission secured an undertaking from Coles and Woolworths that they would no longer insist on tenancy terms that prevented shopping centre managers from leasing space to any competing supermarkets.

The 2024 inquiry will run for a year. The 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.”

The inquiry allows the ACCC to use its compulsory information-gathering powers to collect information from the relevant parties. Their media release pointed out that it was separate from the Government’s 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,” they said.

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