Prime Minister Anthony Albanese says something is clearly “going wrong” with supermarket pricing, but he won’t take a hammer to the Coles and Woolworths duopoly.
Coles and Woolworths have been under sustained pressure over their pricing of groceries, as Australians feel the pinch at the check-out from a 14 per cent rise in the cost of food and drink in just two years.
The ABC’s 4 Corners on Monday revealed the tactics the two giants use to improve their profits — though the CEO of Coles and now-former CEO of Woolworths dismissed claims the companies were price gouging.
Asked on ABC News Radio if Coles and Woolworths were ripping off customers, Prime Minister Anthony Albanese said the giants “quite clearly … have excessive market power”.
“We know that when farmers are saying they’re getting less for their products, that hasn’t necessarily translated through to cheaper prices at the check-out, and it should,” Mr Albanese said.
“If farmers are getting less, and we’re not necessarily arguing for that of course, farmers should get a fair price for their product, but when you have that disconnect between the prices being paid by supermarkets and then the prices being paid by consumers, then something is going wrong.”
Albanese urged to use ‘big stick’ on Coles and Woolworths
There are multiple inquiries running into the issue of supermarket pricing, including an inquiry by the competition watchdog with powers to compel evidence and issue enforceable undertakings to the supermarkets.
That inquiry won’t report until 2025.
Asked whether that was too long for consumers to wait, Mr Albanese suggested the government would not wait for that report to begin acting.
But he has poured cold water over any suggestion the federal government would create divestiture powers to forcibly break up the big supermarket chains, saying Australia is “not the old Soviet Union”.
Mr Albanese said on Friday morning the government would take a common sense approach, and maintain Australia’s “market-based economy with appropriate regulation”.
He said with the two big retailers holding 65 per cent of the market, he would be keen for more international chains to enter the Australian market.
Nationals leader David Littleproud rebuked the prime minister’s Soviet statement, saying it proved Mr Albanese was “oblivious” to the fact that the United States and United Kingdom had divestiture powers.
He said the government should not be ruling divestiture powers out as an option before any report had even been handed down.
“The Nationals offered the government support to introduce big stick legislation, which would provide divestiture powers, as early as December 2022,” Mr Littleproud said.
“The key issue to inflation right now is grocery prices, which is why The Nationals intend to go back to parliament next week and garner more support to give the ACCC the powers and penalties it needs, to ensure we can keep the supermarkets in tow.”
