The Albanese Government has announced its intent to have the Australian Consumer and Competition Commission (ACCC) conduct a year-long inquiry into supermarket prices as allegations of price gouging, a lack of competition in the sector and the cost of living crisis continue.
According to a joint press release by the Prime Minister, Anthony Albanese MP, and the Assistant Minister for Competition, Charities and Treasury, Andrew Leigh MP:
The monitoring announced today is an important part of the Government’s broader efforts to boost competition and put downward pressure on the price of essentials for Australians, including a review of the Food and Grocery Code of Conduct and the Competition Review’s focus on cost-of-living initiatives.
Matters to be considered by the ACCC will include, but will not be limited to:
- The current structure of the supermarket industry at the supply, wholesale and retail levels;
- Competition in the industry and how it has changed since 2008, including the growth of online shopping;
- The competitiveness of small and independent retailers, including regional and remote areas;
- The pricing practices of supermarkets;
- Factors influencing prices along the supply chain, including the difference between farmgate and supermarket prices;
- Any impediments to competitive pricing along the supply chain; and
- Other factors impacting competition, including loyalty programs and third-party discounts.
The ACCC will produce an interim report in 2024 and final report in early 2025 which will provide the Government with findings and recommendations. The Government is working with the ACCC to finalise the direction, which will be issued in coming days.
“Government to launch ACCC inquiry into supermarket prices”, Treasury, media releases, 25/01/2024, https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/government-launch-accc-inquiry-supermarket-prices.
Additionally, the Federal Government has also declared that they will give $1.1 million to CHOICE, Australia’s leading consumer advocacy group, to ensure consumers are provided with transparency and comparisons around price on a quarterly basis for the next three years.
The ACCC’s corresponding media release had this to say:
“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.
“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 inquiry will also look at any emerging issues related to more recent trends, including online shopping, changes in technology, and loyalty programs.
“ACCC to examine prices and competition in supermarket sector”, ACCC media release, 25/01/2024, https://www.accc.gov.au/media-release/accc-to-examine-prices-and-competition-in-supermarket-sector.
The formal direction from the Australian Government has not yet been given to the ACCC but will be publicly available on the ACCC’s website when it is received.