Yahoo Finance Coles, Woolworths respond to new price-gouging investigation
The supermarket giants will face a price probe by the consumer watchdog.
Coles and Woolworths say they are “working to keep groceries affordable” and understand Aussies are “doing it tough”, as an investigation into supermarket prices is announced.
The Australian Competition and Consumer Commission (ACCC) will carry out a 12-month price inquiry into supermarket prices, Prime Minister Anthony Albanese announced today.
Coles and Woolworths have come under intense scrutiny as customers battle higher grocery prices at the checkout, while both supermarkets posted annual profits of more than $1 billion.
Do you have a story to share? Contact tamika.seeto@yahooinc.com
Albanese said Treasurer Jim Chalmers would direct the consumer watchdog to conduct the probe.
“The ACCC has significant powers and it is the best and most effective body to investigate supermarket prices,” Albanese said.
“[The inquiry will] look at how things like online shopping, loyalty programs and changes in technology are impacting competition in the industry. And to examine the difference between the price paid at the farm gate and prices that people are paying at the checkout.
“When farmers are selling their product for less, supermarkets should charge Australians less.”
RELATED
Legal action flagged over Coles, Woolworths ‘deceptive’ pricing tactics
Coles and Woolworths CEOs will face grocery inquiry but prices still 'don't pass the pub test'
Coles and Woolworths grocery shop comparison: Which Aussie supermarket is cheaper?
The government will also fund consumer group CHOICE to help shoppers find the best deal and to provide clear and regular information on prices.
“These actions send a very clear message: our government is prepared to take action to make sure that Australians are not paying one dollar more than they should for the things they need,” Albanese said.
Coles, Woolworths respond
Both Coles and Woolworths said they welcomed working with the ACCC on its inquiry.
Coles said it was “working hard to keep groceries affordable for Australian households and families”.
“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 told Yahoo Finance.
Coles claimed it had kept price inflation in its supermarkets below the rate reported by the Australian Bureau of Statistics for the past 16 quarters.
Woolworths Group CEO Brad Banducci said the supermarket “welcomed the opportunity to assist the ACCC”.
"We know many Australian families are doing it tough and looking for relief at the checkout,” Woolworths Group CEO Brad Banducci said.
"Food inflation has continued to moderate in recent months and we expect this to continue throughout 2024."
Supermarkets under the spotlight
The consumer watchdog inquiry follows a review into the grocery code of conduct, headed by former Labor minister Craig Emerson.
The code regulates conduct between supermarkets and suppliers and is currently voluntary, however, the review will consider whether it should become mandatory.
A separate senate inquiry, led by the Greens, is also set to probe allegations of price gouging by the supermarket giants.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.