ACCC to conduct inquiry into prices in Aussie supermarkets

The ACCC has welcomed the Australian Government’s announcement that it will direct the ACCC to conduct an inquiry into Australia’s supermarket sector, including the pricing practices of the supermarkets and the relationship between wholesale, farm gate and retail prices.

The inquiry will also examine competition in the supermarket sector and how it has changed since the ACCC’s last inquiry in 2008.

Gina Cass-Gottlieb, ACCC Chair, said, “We know grocery prices have become a major concern for the millions of Australians experiencing cost-of-living pressures.

“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.”

Following the 2008 inquiry, Coles and Woolworths provided enforceable undertakings to the ACCC to remove restrictive tenancy provisions that may have prevented shopping centres from leasing space to competing supermarkets. The ACCC’s investigation identified more than 700 potentially restrictive leases.

According to ACCC Deputy Chair Mick Keogh, competitive markets encourage more attractive combinations of price and quality.

The inquiry will examine the nature of the competitive environment between supermarkets as well as any barriers to greater competition and new entries.

“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,” Keogh said.

Any emerging issues related to more recent trends, including online shopping, changes in technology and loyalty programs, will also be examined.

The ACCC expects to publish an issues paper in February, seeking views on key issues it will consider in the inquiry. An interim report will be provided to the Australian Government later this year, and the final report is due to be provided early next year.

The ACCC will publish the formal direction from the Australian Government, including the terms of reference, when it has been received.

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