Australian supermarkets should not be treating customers like “mugs”, the treasurer says, as a competition watchdog report found Coles and Woolworths had been running an oligopoly in the sector.
The Australian Competition and Consumer Commission released its final report into supermarkets on Friday, finding major chains had little incentive to be competitive on pricing due to their large market share.
The commission said Coles, Woolworths and Aldi were among the most profitable supermarkets in the world and faced little competition.
Treasurer Jim Chalmers said the government would act on all 20 recommendations from the report, indicating people were still feeling price pressures at grocery stores.
“We don’t want the supermarkets to be treating Australians like mugs. They’re under enough pressure as it is already,” he told Nine’s Today program on Friday.
“Even with inflation coming down really quite substantially in our economy, Australians are still feeling that pressure at the checkout, and that’s why we’re cracking down on the supermarkets.”
The report said there was no “silver bullet”, delivering a suite of recommendations to address four broad issue areas.
Increased transparency, such as mandated publication of price and package size information, would help clamp down on shrinkflation and dodgy discounting.
It also recommended financial support for community-owned stores to improve choice and supply in remote areas.
The watchdog did not, however, back a proposal supported by the Coalition to break up major supermarkets.
Chalmers said the risk of divesting supermarket chains outweighed the benefits.
“If you make one of the big chains sell in the community, there’s a risk that it’s just snapped up by the other big player in the supermarket sector and that would be counterproductive,” he told ABC TV.
Better price transparency is on the cards. (Source: Getty Images)
Nationals senator Bridget McKenzie said the report was a “flaccid” response from the government to address cost-of-living concerns.
“I didn’t hear any tough measures that are actually going to put a very strong incentive for our supermarkets to behave better,” she told Sky News.
“They haven’t actually taken a big stick to it.”
Despite the commission not backing breaking up supermarkets, Senator McKenzie said the idea should still be carried through.
“We don’t want those larger entities in the supermarket sector monstering the small business that are supplying them,” she said.
“We need it here as a measure to really say to these supermarkets, ‘you are unable to treat people egregiously anymore’.”
Opposition Leader Peter Dutton has vowed to give the commission powers to divest the major chains to address anti-competitive behaviour if he wins the next election, due by May 17.
Prime Minister Anthony Albanese has derided the proposal as a relic from the Soviet Union.
While Coles and Woolworths are far and away the biggest players in the sector, foreign-owned “hard discounter” Aldi and independent supermarkets supplied by wholesaler Metcash provide important competition.
The large scale of Australian supermarket chains has resulted in a relatively efficient food supply system, benefiting consumers, the commission acknowledged.
“In particular, ALDI, Coles, Metcash and Woolworths have a scale and scope that provides convenience to many Australians and benefits them through efficiencies in their procurement, logistics and other business functions,” the report said.
The supermarkets maintain they have not engaged in price-gouging, claiming their profit margins haven’t increased dramatically in recent years.
“Customers are increasingly cross-shopping and splitting their grocery spend across a range of retailers – both in store and online,” the supermarket giant said in response to the report.
“Coles must compete vigorously for a share of consumers’ grocery baskets.”
Coles added that it understood the cost-of-living challenges faced by families and warned against measures that will “increase red tape and drive up costs”.
The post Supermarkets Coles & Woolworths Have ‘Limited Incentive’ To Compete On Price, ACCC Finds appeared first on PEDESTRIAN.TV .
