Consumer watchdog to use ‘significant powers’ in grocery pricing investigation

“Evidence available to the inquiry suggests that retailers do not set farm gate prices, but rather these prices mirror supply and demand factors in the relevant market,” the ACCC said in 2008.

“In general, the major supermarket chains do not buy sufficient amounts of product to control the market price.”

Former ACCC chair Allan Fels, who recently conducted an inquiry into the supermarkets for the ACTU, said there appeared to be a discrepancy between how quickly the supermarkets raised prices when farmgate prices increased, and how slow supermarkets were to reduce prices when producer costs fell.

“We heard quite a while ago that the farmers were being paid less, but there’s no change and indeed, the actual retail price crept up,” he said.

The National Farmers Federation said the inquiry was good news for farmers, who have long wanted greater transparency from the supermarket giants, but warned the final report due in early 2025 could not be left to gather dust on a shelf.

“We need the ongoing commitment of government to act on any outcomes from this inquiry,” a spokesperson said.

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“Reports and recommendations don’t make our food system fairer. We need sustained political leadership and action.”

A Coles spokesperson said the supermarket was working hard to keep groceries affordable for Australian households.

“We are doing this against a challenging environment of high inflation, with rising costs that affect the whole economy including farmers, suppliers and retailers, and impact the prices customers pay at the checkout,” the spokesperson said in a statement.

The spokesperson said Coles has kept price inflation in its supermarkets below the Australian Bureau of Statistics rate, and the grocery business looked forward to explaining its relationships with suppliers in the inquiry.

Woolworths Group chief executive Brad Banducci also welcomed the opportunity to help the consumer watchdog with its inquiry.

“We know many Australian families are doing it tough and looking for relief at the checkout,” he said. “Food inflation has continued to moderate in recent months and we expect this to continue throughout 2024.”

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