Monday, June 17, 2024

ACCC to examine supermarket prices and competition

The Australian government has announced that it will direct the ACCC to conduct an inquiry into Australia’s supermarket sector.

The year-long inquiry will examine the pricing practices of the supermarkets, along with the competition in the supermarket sector and how it has changed since the ACCC’s last inquiry in 2008. It will also look at any emerging issues related to more recent trends, including online shopping, changes in technology, and loyalty programs.

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

“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.”

Commenting on today’s announcement, Woolworths Group CEO Brad Banducci says the retailer notes the government’s decision and welcomes the opportunity to assist the ACCC with its inquiry.

“We know many Australian families are doing it tough and looking for relief at the checkout,” he says.

“Food inflation has continued to moderate in recent months and we expect this to continue throughout 2024.”

Following the ACCC’s 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.

“Competitive markets encourage more attractive combinations of price and quality for consumers, as well as greater choice,” says ACCC Deputy Chair Mick Keogh.

“Our inquiry will examine the nature of the current competitive environment between supermarkets, as well as the barriers to greater competition and new entry in the sector.

“We believe we’re 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.”

The ACCC expects to publish an issues paper in February seeking views on the key issues i will consider in this 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.

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