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 to examine current competitive environment
ACCC chair Gina Cass-Gottlieb said the ACCC understood 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,” she 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.
ACCC deputy chair Mick Keogh said competitive markets encourage more attractive combinations of price and quality for consumers, as well as greater choice.
“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.
Sustained political leadership and action needed – NFF
National Farmers Federation president, David Jochinke, said ACCC probe into the supermarkets is good news for farmers 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.
“We need the ongoing commitment of government to act on any outcomes from this inquiry,” he said.
“We’ve seen past reports collect dust on shelves in Canberra.
“Reports and recommendations don’t make our food system fairer,” Mr Jochinke said.
“We need sustained political leadership and action.”
Mr Jochinke also called on the government to maintain its momentum on broader competition reforms that will create a fairer policy environment for farmers.
“We congratulate the Albanese Government for taking this first step and look forward to engaging with the ACCC on behalf of our members.
“The NFF and its members have been calling for this for a long time. It shows the power of advocacy on behalf of farmers.”