Deborah Ombo Botende

Australian supermarket giants Coles and Woolworths have come under fire for their soaring profits while everyday Australians struggle with rising inflation, rent increases, and interest rate hikes. To address these concerns, the Greens have called for a Senate inquiry has been initiated to investigate the market power and pricing decisions of these retail giants.

The inquiry, supported by cross-party collaboration and led by the Greens, aims to examine the impact of market concentration on food prices and the pricing strategies employed by Coles and Woolworths. Nick McKim, the Greens spokesperson for economic justice, emphasised the need to challenge the excessive market power held by these supermarkets, which allows them to dictate prices and terms that burden consumers.

“This inquiry is a critical step toward dismantling the market concentration that’s led to unfair pricing and stifled competition,” said McKim. “We’ll find a way to dismantle their power and bring grocery prices down.”

Despite the economic challenges faced by households and the significant increase in grocery prices, both Coles and Woolworths have reported substantial annual profits. This has raised concerns that these companies have taken advantage of the inflationary period to inflate prices beyond the additional costs they face.

Representatives from Coles and Woolworths have confirmed their willingness to appear and provide evidence if called upon by the inquiry. Coles CEO Leah Weckert stated that the company is actively working to alleviate cost-of-living pressures for Australian families and is committed to engaging with the committee to explain the factors influencing supermarket pricing.

“Coles’ total supermarkets’ price inflation declined to 3.1 percent for the July-September quarter,” Weckert said in a statement. “Fresh food, including produce, meat, deli, and seafood, experienced deflation of 2.3 percent during the same period.”

Woolworths Group CEO Brad Banducci echoed Weckert’s comments, highlighting that the company would address the senators and explain the challenges faced due to economy-wide inflationary pressures. He emphasised the competing needs of customers and suppliers in this complex landscape.

Contributing to the discussion is a Political Economist expert Professor Hui Feng from Griffith University. After analysing the nature of the senate inquiry, Professor Feng has suggested a potential solution, stating,

“Regardless of the result of the inquiry, there are some possible options moving forward. Both the government and the market can be a part of the solution. The government could seize the opportunity and strengthen regulatory measures by threatening to escalate into a royal inquiry, while suppliers for the supermarket, particularly fresh producers could consider forming sales cooperatives that have more power at the bargaining table.”

The federal parliament’s price gouging inquiry seeks to shed light on the practices of Coles and Woolworths, ensuring transparency and accountability in the pricing decisions of these supermarket giants. It aims to create a fairer and more competitive market that benefits Australian consumers and addresses the concerns surrounding rising grocery prices.

What is “Price Gouging”?

According to the Australian Competition & Consumer Commission (ACCC), ‘price gouging’ or ‘excessive pricing’ refers to when people consider the prices charged by a business to be too high. It is not illegal for businesses to set high prices or increase prices in response to sudden demand or supply shortages. However, it is illegal for businesses to make false or misleading claims about prices, including the reasons for price increases. Surge pricing, which involves temporary price increases during periods of high demand, is also allowed as long as businesses are transparent about the prices consumers will pay.

Businesses have the freedom to set their own prices, and supply and demand factors can impact prices. Price gouging and sudden price increases are not illegal, but it is illegal for businesses to mislead or engage in anti-competitive pricing behaviours and practices. This regulatory gap has allowed supermarket giants like Coles and Woolworths to potentially exploit the Australian population through excessive pricing during a cost-of-living crisis. Many Australians, including university students like us, continue to struggle to afford basic groceries.

Further Reading: North Queensland Supplier speaks on Supermarket Price Gouging – The Griffith Journal (wordpress.com)

Writer’s Note:

By shedding light on this inquiry, we hope to hold both Cole’s and Woolworth accountable if they are found to be price gouging the Australian public. Our goal is for the ACCC to address the issue of surge pricing within the supermarket industry. The Australian public deserves a fair and transparent legal system that protects them from the greed of supermarkets, regardless of their size or industry influence.