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Greens in Australia initiate a parliamentary investigation into price gouging by supermarkets.

‘The big supermarkets have had too much market power. This allows them to dictate prices and terms that are hitting people hard,’ said Greens senator.

Australia’s major supermarkets will be subject to a new investigation amid accusations of profiting from the cost of living crisis.

On Dec. 3, the Australian Green Party announced that they would launch a senate inquiry into the alleged price-gouging practice of major supermarkets.

The inquiry will scrutinise the impact of market concentration on food prices as well as how two major supermarket chains, Coles and Woolworths, implement their pricing strategies.

Specifically, it will assess the price growth of essential items, the validity of discounts offered by supermarkets, as well as the changes in their profits during economic hardship.

Greens Senator Nick McKim alleged that Coles and Woolworths, which commanded around 65 percent of Australia’s grocery market in the 2021-2022 financial year, were making billions in profits by price gouging in a living cost crisis.

“Coles and Woolworths are making billions in profits because they feel that they can overcharge people without repercussions. It needs to end,” he said in a statement.

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“For too long, the big supermarkets have had too much market power. This allows them to dictate prices and terms that are hitting people hard.”

The Greens senator also believed that it was time to “smash” the Coles-Woolworths duopoly.

“This inquiry is a critical step toward dismantling the market concentration that’s led to unfair pricing and stifled competition,” he said.

“It is about ensuring that Australians can afford to eat without being exploited, and that suppliers are treated fairly.”

The Greens’ announcement comes after Coles and Woolworths reported an increase in profits for the 2022-2023 financial year.

Woolworths’ net profit rose from $1.55 billion (US$1.03 billion) to $1.62 billion during the year, while Coles’ climbed by 4.8 percent to $1.10 billion.

Supermarkets’ Response

In response to the Greens’ accusation of price gouging, Coles stated that its inflation rate had recently been moderating.

“Total supermarkets price inflation declined to 3.1 percent for the 1Q24 (5.8 percent in 4Q23),” a Coles spokesperson told The Epoch Times.

The above figure is lower than the current headline inflation rate of 5.4 percent.

The supermarket also said it was under pressure from rising operating costs and suppliers’ requests.

“Coles is also not immune to the increased cost of doing business–construction costs, energy prices, the cost of logistics, and packaging have all risen,” the spokesperson said.

“Our suppliers are also challenged with many of the same increases and, rightly so, we have experienced a greater volume of supplier price increase requests, which we have to balance.”

At the same time, Coles believed that being profitable would allow the supermarket chain to serve Australians better and support its large number of employees and shareholders.

“It also puts us in a position to invest in value like Great Value Hands Down, thousands of weekly specials, our Flybuys program for our customers to save, and have confidence they can buy good food in our supermarkets,” the spokesperson said.

 People line up outside a Coles supermarket in Melbourne, Australia, on Aug. 2, 2020. (Darrian Traynor/Getty Images)
People line up outside a Coles supermarket in Melbourne, Australia, on Aug. 2, 2020. (Darrian Traynor/Getty Images)

Meanwhile, a Woolworths spokesperson told The Epoch Times that the supermarket giant was aware of the impact of high living costs on Australians and was working to deliver relief to consumers.

“As we start to see the rate of inflation ease, we will continue to focus on delivering savings to our customers,” the spokesperson said.

“We are committed to offering our customers value while working with our suppliers to sensitively manage economy-wide inflationary pressures.”

According to the supermarket’s data, Woolworths offers 6,000 special deals each week and is reducing the prices of 400 products during this summer.

Nationals Say Parliamentary Inquiry Not Helpful

While the Greens are pushing for a senate inquiry, Nationals Leader David Littleproud has said such a probe will take too long and not solve the current cost of living crisis.

“The cost-of-living crisis is now, not next year and the supermarkets have form on this, having gouged consumers during COVID,” he said.

The leader also believes the appropriate course of action is to have the consumer watchdog investigate whether supermarkets have engaged in price gouging.

“An Australian Competition and Consumer Commission inquiry could have started the investigation before Christmas, and actions … can be undertaken immediately, without having to wait for the completion of the [parliamentary] inquiry,” Mr. Littleproud said.

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