Supermarket inquiry condemns ‘price gouging’ in final report

Sheep Central, May 8, 2024

AUSTRALIA’S Food and Grocery Code should be made mandatory and expanded to greenlife industries and food/grocery product retailers, with significant breach penalties, a Greens-led Senate Select Committee on Supermarket Prices has recommended.

The committee’s final report released yesterday also recommended making price gouging illegal and introducing divestiture laws to create powers to break up Australia’s supermarket duopoly.

The committee has also recommended:

  • The establishment of a Prices and Competition Commission to examine and monitor prices and price setting across the economy and require supermarkets to publish historical pricing data.
  • That the Australian Competition and Consumer Commission be given powers to investigate land banking and unfair trading practices.
  • Supermarkets be made to adopt mandatory standards for unit pricing, and notify customers of changes in sizes or prices of products, to help prevent shrinkflation
  • The Federal Government standardise discount and promotional terms, to prevent supermarkets promoting fake discounts.
  • The Federal Government back stronger health and safety standards for supermarket employees
  • Further investigation of the role of multinational food manufacturers in price increases in Australia, and;
  • That the National Food Waste Strategy is updated to require supermarkets to publish data on food waste and consider whether unrealistic cosmetic standards are adding to waste.

Greens economic justice spokesperson and committee chair Senator Nick McKim said the landmark report has made serious proposals to tackle the price of food, “and the profiteering that has done so much harm to the people of Australia.”

“The committee has produced concrete steps that would tackle these problems head on.”

“Chief among these is the recommendation that price gouging be made illegal.”

“This would mean that corporations couldn’t just arbitrarily increase prices without facing consequences from the courts.”

“This would be a significant new power to stop unreasonable pricing that has been rampant for years because of a lack of competition.”

“The committee has also recommended divestiture powers for the supermarket sector, which would give the Federal Court the power to break up corporations when they abuse their market power or act unconscionably.”

“The committee has heard the devastating evidence on the effects of price gouging and how hard it is hitting people,” Senator McKim said.

“The Greens established this inquiry to bring food prices down and that is exactly what our recommendations will do.”

“We’ve heard from farmers and suppliers about how the massive market power of Coles and Woolworths is allowing them to act unconscionably.”

“But without the ability to break up the duopoly, our market will remain skewed towards the interests of a few powerful players and nothing will change.”

“There is a Bill before Parliament right now to create divestiture powers. The only thing standing in its way is the Labor Party.”

Report findings proof of ‘profit push’ – NSW Farmers

NSW Farmers vice president Rebecca Reardon said the inquiry report findings were further proof of the ‘profit push’ pricing practices of the nation’s major supermarkets that farmers and consumers had been grappling with for years.

“Prices are not down – supermarkets have clearly profited off consumers amid a cost-of-living crisis, while also using predatory pricing to extract huge margins from farmers too.

“The huge market power our grocery giants have held for too long is what has enabled this behaviour to spiral further and further beyond our control, backing farmers and families into a corner from which they cannot escape,” Mrs Reardon said.

With 14 recommendations handed down by the Senate to address supermarket pricing practices, Mrs Reardon said the inquiry findings were a strong step forward towards fairer prices for farmers and families moving forward.

“The Senate has heard the evidence and seen the light – we need to crack down now on price gouging and make our Food and Grocery Code mandatory and more enforceable, before more farmers are forced out of business for good.

“It is pleasing to see the Senate also listen to our calls to introduce divestiture power provisions, expand the powers of the ACCC and take measures to increase price transparency in the food and grocery sector,” Mrs Reardon said.

“However, real consequences and real action is what we need if we want to reform our grocery superpowers for good – and so the fight won’t be over until we have recommendations translated into legislation that can prosecute unfair behaviour by our supermarkets.”

The full report can be found here.



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