Senate Committee Report Findings from Retail Inquiry

Fruit Growers Tasmania | Friday, 10 May 2024, 11.30am

The Senate Select Committee, chaired by Nick McKim has handed down its findings this week on supermarket pricing.

The committee received public submissions from 155 individuals and businesses including Fruit Growers Tasmania and several Tasmanian growers regarding the trading activities of the large supermarket chains.

The Australian retail grocery sector, in 2023 was worth $135 billion with three main vertically integrated chains - Coles, Woolworths and Aldi, holding 73% of market share. In 2023 Coles and Woolworths had combined sales of $80 billion. If we include Metcash, the main wholesaler for the independent supermarkets such as IGA stores, Harris farm, Drakes etc., then these four, control 82% of the market.

The committee recognised that the in the midst of a cost of living crisis in Australia, the large supermarket chains are making record profits. The evidence from shoppers, consumers, farmers and other suppliers, supermarket employees and even smaller supermarket competitors has shown that reform of the supermarket sector is needed. According to the report “The supermarket duopoly in this country is operating without proper oversight and restraint, thanks to outdated and ineffectual consumer and competition law”.

It was the Committee’s view that reform was required, and should be progressed through:

divestiture powers, to reduce the market share of supermarkets, where a supermarket retailer has been found to have misused their market power or engaged in unconscionable conduct;
prohibiting the charging of excess prices (ie price gouging);
creation of a new Commission on Prices and Competition with appropriate powers of oversight, investigation and referral to the Australian Competition and Consumer Commission (ACCC);
giving the ACCC new and improved powers to investigate and enforce unfair trading practices and pricing, the Unit Pricing Code, merger reforms and other competition and consumer laws;
making the Food and Grocery Code of Conduct mandatory, and including the greenlife industry in the code (such as plants and seedlings sold through Bunnings);
reforms to the Unit Pricing Code to introduce mandatory labelling standards and to help consumers identify and understand 'shrinkflation' (i.e. reducing product size whilst maintaining the retail price) and promotional material; and
strengthening the National Food Waste Strategy.

Read the full report of the findings here