Yahoo Finance Woolworths, Coles to front inquiry into alleged supermarket price gouging
The supermarket giants will face questioning by a Senate inquiry, as Aussies are hit with rising grocery bills.
Woolworths and Coles are set to be grilled about their grocery prices, with a Senate inquiry into alleged supermarket price gouging to be established this week.
The Greens have secured cross-party support to establish the inquiry, which will scrutinise the impact of market concentration on food prices and the pattern of pricing strategies employed by the duopoly.
It will also look into the large increases in the prices of essentials, the validity of discounts offered by the supermarkets, and profit inflations.
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Greens economic justice spokesperson Senator Nick McKim said Coles and Woolworths had had too much market power for too long.
“Coles and Woolworths are making billions in profits because they feel that they can overcharge people without repercussions. It needs to end,” McKim said.
“We want the CEOs to justify their decisions in a public hearing. This inquiry is a critical step toward dismantling the market concentration that's led to unfair pricing and stifled competition.”
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Nationals leader David Littleproud has argued the inquiry won’t go far enough and will take too long. He has called for an Australian Competition and Consumer Commission (ACCC) inquiry instead.
"The cost-of-living crisis is now, not next year and the supermarkets have form on this, having gouged consumers during COVID," he said.
"An ACCC inquiry could have started the investigation before Christmas and actions ... can be undertaken immediately, without having to wait for the completion of the inquiry."
The last time the ACCC looked at the competitiveness of Australia's supermarket sector was in 2008.
Woolworths, Coles profits top $1b
Woolworths posted a $1.6 billion profit last financial year, up 4.6 per cent, while Coles recorded a $1.1 billion profit, up 4.8 per cent.
A Woolworths spokesperson said the supermarket was “working to deliver relief” to Aussies’ weekly grocery shop.
“As we start to see the rate of inflation ease, we will continue to focus on delivering savings to our customers,” the spokesperson said.
A Coles spokesperson said they “believe all Australians should be able to put quality food on the table for their families, at a good price”.
They said having a “profitable business” meant they could continue to serve Aussies and employ 120,000 staff.
‘Broken’ grocery system
Woolworths and Coles make up about two-thirds of Australian grocery sales, while Aldi accounts for about 10 per cent.
Australia Institute senior economist Matt Grudnoff said Australia had a “broken grocery market” at the moment due to lack of competition.
“Inflation is higher because Coles and Woolies are increasing their prices more than they otherwise would be if they were just recouping their costs,” he told Yahoo Finance last week.
“They are part of what economists call an oligopoly. And, essentially, that's why they're able to earn these bigger profits.”
- with NCA NewsWire
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