Government Allocates $30 Million to Enhance Supermarket Pricing Investigation
The government is planning reforms to boost competition in supermarkets by easing entry barriers and opening more sites for new businesses.
The Albanese Labor Government has allocated $30 million (US$21 million) in funding for the Australian Competition & Consumer Commission (ACCC) to conduct an extensive investigation and enforcement in the supermarket and retail sectors.
This decision follows the ACCC’s legal action against retail giants Coles and Woolworths for allegedly deceiving customers with their discount pricing on numerous everyday products.
Prime Minister Anthony Albanese responded by stating, “We are taking measures to ensure that ordinary Australians, families, and pensioners are not exploited by supermarkets. We are making sure they are treated fairly at the checkout.”
Additionally, Treasurer Jim Chalmers has announced efforts to reform planning and zoning regulations to reduce barriers for new businesses by opening more sites for supermarkets, in collaboration with state and territory governments through the Council on Federal Financial Relations.
The current regulatory frameworks, including land use restrictions and zoning laws, have been criticized for hindering competition and facilitating land banking, which raises prices for consumers.
Chalmers stated, “We are taking decisive action to help Australians get fairer prices at the supermarket checkout, in stores, and online.”
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Chalmers also mentioned that the additional funding for the ACCC will contribute to fairer pricing, increased competition, and imposing significant penalties on supermarkets engaging in unethical practices.
On September 27, the ACCC identified Woolworths and Coles as major players in an “oligopoly.” The interim report spanning 265 pages revealed a decline in consumer trust towards the supermarket giants, with nearly half of the respondents expressing concerns about prices, compared to 17 percent in 2008.
Issues such as deceptive pricing strategies, penalties within loyalty programs, and limited bargaining power for suppliers were highlighted.
The report emphasized that it took Aldi two decades to secure a 9% share of the Australian market, underscoring the challenges in entering and expanding within the sector.
It argued that planning and zoning laws hinder a supermarket’s ability to establish new stores by adding extra costs or substantial delays.
Furthermore, the government unveiled several other initiatives, including the introduction of a new mandatory Food and Grocery Code, subjecting major supermarkets to significant penalties for severe violations.
The consumer advocacy group CHOICE also released a price monitoring report funded by the government, providing information on where Australians can find the most affordable groceries.
As a crucial step, the Commission will summon supermarket executives for a public inquiry in November.
