ALDI, IGA chiefs under Senate spotlight as inquiry delves into grocery costs

As the cost of living continues to rise, Australians are feeling the pinch with every trip to the grocery store.

With supermarket prices climbing, many are left wondering whether the big chains are playing fair.

It's a question that's about to be put under the microscope as supermarket bosses face a Senate inquiry into grocery prices.


The inquiry, which is already causing a stir among consumers and industry stakeholders alike discussed allegations of price gouging, high profits, and questionable conduct towards suppliers.

It's a rare opportunity for the public to get a glimpse behind the curtain of the grocery industry and understand the dynamics that determine the price tags on the shelves.


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Executives from ALDI and IGA appeared before a Senate inquiry on Thursday amidst allegations of price gouging, high profits, and poor conduct towards suppliers. Credits: Shutterstock


On April 11, the spotlight first fell on Anna McGrath, the chief executive of ALDI in Australia, and Grant Ramage of Metcash Limited, which owns the IGA brand and hardware seller Mitre 10.

They were the first to answer the Senate's probing questions.

The inquiry also extended to Endeavour Group, the owner of Dan Murphy’s and BWS, who were expected to justify their pricing strategies.


The Senate committee is determined to get to the bottom of the issues that have been brought to light by farmer lobby groups and vegetable growers.

These groups have previously testified that the grocery retail giants are wielding their market power to set unfair prices and short-change food suppliers, a claim that has resonated with many Australians who value fair play and community support.

ALDI, in its submission, defended its pricing strategy, claiming a 4 per cent increase in customers in 2023 due to its ‘year-round’ low prices, as opposed to the fluctuating mark-ups and discounts seen at other supermarkets.

The German-headquartered chain asserted that its stable pricing model provides clarity and certainty for customers, leading to more savings throughout the year.

‘ALDI’s prices are more stable than at some of the other supermarkets,’ the submission stated.

‘Permanently low prices across the majority of the ALDI range means more clarity and certainty for customers as well as more savings year-round for shoppers.’


Earlier reports said Metcash, the group behind IGA, was likely to highlight its unique position in the market, with its network of family-owned supermarkets and smaller buying power.

‘Metcash in seeking to secure the best terms possible for our retailers has some influence over supermarket pricing of fresh produce and meat, this is relatively minor compared to integrated supermarket chains which operate across a much wider span of the fresh food value chain from primary producer to shopper,’ its submission read.

The inquiry is building up to a final showdown next Tuesday when Coles boss Leah Weckert and outgoing Woolworths counterpart Brad Banducci will take the stand.

Both chains reported annual profits exceeding $1 billion last year, a figure that stands in stark contrast to the financial struggles faced by many Australian households.


Greens senator Nick McKim, who chairs the committee, promised that the executives will be held to account, facing tough questions about their profit margins and the financial pressures on both shoppers and farmers.

‘They’ll have to answer for price gouging shoppers and putting the squeeze on farmers,’ Senator McKim asserted.

‘They’ll have to explain how they are raking in billions in profits while millions of Australians are struggling to put food on the table.’

In addition to the Senate inquiry, the supermarket chains are also bracing for a 12-month investigation by the ACCC, which will assess pricing practices and deliver an interim report in August.

Proposed changes to the Food and Grocery Code could also introduce stricter rules for how supermarkets deal with suppliers and customers later this year.

While Coles and Woolworths denied engaging in price gouging, attributing higher store prices to increased production costs, the upcoming inquiry will undoubtedly shed more light on these claims.


With the Senate inquiry regarding various practices within the retail sector underway, consumers are likely to be closely scrutinising their local supermarkets for any changes.

The developments come just as shoppers have noticed subtle alterations at some supermarket stores, sparking speculation ahead of the upcoming inquiry into potential price gouging.

This heightened awareness among consumers underscores the significance of transparent and fair practices within the retail industry, prompting a closer examination of how supermarket chains operate and interact with their customers and suppliers.
Key Takeaways

  • Executives from ALDI and IGA appeared before a Senate inquiry into grocery prices and faced questions over rising grocery costs and allegations of price gouging.
  • ALDI reported an increase in customers and attributes this to its policy of offering low prices year-round, as opposed to fluctuating discounts and markups.
  • Metcash, which owns IGA, might highlight its differences from major chains by pointing to its support for family-owned stores and its limited influence on pricing compared to larger supermarkets.
  • The heads of Woolworths and Coles were set to appear before the inquiry amidst criticisms of high profits and pressures on farmers, while supermarket chains also face scrutiny from the ACCC and potential changes to the Food and Grocery Code.
What are your thoughts on the rising cost of groceries? Have you noticed price hikes in your local supermarket? Let us know your experiences and opinions in the comments below.
 
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They're all crooks 🤬
These supermarket people don't have any conscience when it comes to ripping off customers......just want their billion $ profits !
 
It's all a con! The Greens and Labor do not give a toss about the ordinary people. Diversion tactics. Easy way to lower grocery items:
1. Change direction on this Net Zero nonsense ( Apparently now, Net Zero won't be enough, and Negative Zero is beginning to enter the arguments), and lower electricity prices.
2. Lower petrol prices ( This can be done in 24 hours)
3. And high labour costs, with Unions wanting more and more.
Take a close look at the so called $billions in profit and show it as a percentage of overall investment, If a local small business was running on those margins, it's Accountant and Financial Advisor would be advising the owner to close up and get a job in the Public Service.
The Unions charging high wages?? High wages? Must be the CEOs' Union!

As for Net Zero; sorry folks but if you don't stop using oil and gas your kids and grandkids will be cooked, just like those Africans dying now of heat stroke because of El Nino and Anthropogenic Global Heating, 48 degrees C with high humidity will kill.
 
It has been a bit of a shock when shopping at Coles last week indicating a general increase in the weekly shopping bill of a 3rd or more on last year. However, I query the big differences seen in Coles of prices for same items and brands to those being sold in Aldi at a cheaper cost. These items surely must come from same manufacturer/supplier: why the big price difference?:confused:
 
How can they make a profit of $1.6 billion and blame the price rises in production costs?
The increased production costs would be eating away at their profits, reducing them to the final sum which has come from us consumers.
 
I don't shop at the two big supermarkets unless in an area where I have no choice. Aldi, IGA and Maxi are the markets of choice. Generally cheaper and with a much greater selection in most cases, with prices that don't hurt.
 
What people forget is that we, the customer, can vote with our feet! We, the customer, can personally stop coles and woollies in their tracks.
If every Australian would choose to not shop at the big 2 for just one week, then they would soon get the picture.
So people, stop complaining about the "big 2", and start a campaign for all Australians to band together for just one week to let them know what we think of price gouging!
I'm sure the Albrecht family in Germany would be totally in support of your idea. Instead, stop buy stuff made overseas and buy from AUSTRALIAN owned businesses.
 
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How can Cole’s and woolies say they ‘denied engaging in price gouging, attributing higher store prices to increased production costs,’ they are not producing’ the fresh foods’, the farmers are!.. the farmers are being ripped off by theses supermarket chains… being paid a pittance for 'their' hard work in producing the foods.. and IF it is higher production costs which is leading to higher prices, wouldn't that means there is no way they could be making BILLIONS in profits… pay more, keep prices low but make less?.. pay more, maybe break even?… pay more but ram up prices heaps more so we can make billions in profits… after all people have to eat dont they?
The sign of a guilty party is to deny, deny. deny.
 
It's all a con! The Greens and Labor do not give a toss about the ordinary people. Diversion tactics. Easy way to lower grocery items:
1. Change direction on this Net Zero nonsense ( Apparently now, Net Zero won't be enough, and Negative Zero is beginning to enter the arguments), and lower electricity prices.
2. Lower petrol prices ( This can be done in 24 hours)
3. And high labour costs, with Unions wanting more and more.
Take a close look at the so called $billions in profit and show it as a percentage of overall investment, If a local small business was running on those margins, it's Accountant and Financial Advisor would be advising the owner to close up and get a job in the Public Service.
And in your estimation the LNP do give a toss, give us a break how many times did the LNP investigate supermarkets, all they did was give millions to their rich mates in big business.
 
What is the point of us " Seniors " trying to get the Government to understand our plight regarding the cost of living when all the Politicians do is Sympathise with our circumstances..they probably think it makes us feel better !!!!
The best part is when they ( Politicians ) send messages asking for a D O N A T I O N.
 
All words which mean nothing, action is what we are looking for....I wouldn't hold my breath though.... the grocery chains are 'hand in glove' with the government.
I tend to agree, It’s really to give the people the illusion that the Govt. is actually doing something about it:
After all, we are a free market driven economy/democracy, and businesses are free to set their own prices and profit margins.
If this or any Govt. is really interested in collusion and price gouging they should turn their attention on the Petrol Companies:
Many years ago I wrote to the ACCC about the regular price cycling by ALL the petrol companies (something that’s still happening now: where petrol prices suddenly jump ~40cents/liter, and slowly trickle down) and the ACCC’s response was to fill up when prices were low: Pretty useless advice if you need petrol when the prices have jumped:
Last year I visited a friend in Hungary (which is no-longer a communist country) and was surprised to find that the price of petrol was the same EVERYWHERE, by every petrol company, in other words, the Govt. set the price.
But this doesn’t seem to be a concern by any of our Govt’s or politicians, because they get a car and free petrol.
 
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Who does the guy from IGA think he is kidding? The store in my area has systematically got rid of the cheaper, generic (?) brands (such as Black & Gold), and substituted another, higher priced line. And as well as the luxury items, the essentials have been steadily increasing to much higher pricing where it makes it almost impossible to live on much else than 2 minute noodles and bread & butter! And even that's sneaking up. What used to be the cheaper cuts of meat are now bordering on the luxury lines. Forget them all - all cuts of beef, pork, lamb and chicken including the once cheap minces.
 
And in your estimation the LNP do give a toss, give us a break how many times did the LNP investigate supermarkets, all they did was give millions to their rich mates in big business.
We can grumble all we want but Australia is the Land of Grope and Tory. Which lousy Tory Federal Governments have won the majority in the House of Reps for the 27 years out of the last 30 ? LNP. That leads me to believe that Australians just lurv getting ripped off by Australia's Tories; and as for Tasmania, you lot have just voted for the same old garbage that is ripping off the taxpayer to the tune of $750 000 000 to build a new footie stadium for the AFL; meanwhile we can't get to see a GP in under 2 weeks and the Emergency Department in the Royal Hobart Hospital is overworked and Launceston General Hospital was advertising for locum doctors at $3 000 per day, accommodation and transport from God knows where paid.

But "heroes" in tight shorts get $750 000 000funding to kick an oval ball into the air before bumping into each other.
 
I tend to agree, It’s really to give the people the illusion that the Govt. is actually doing something about it:
After all, we are a free market driven economy/democracy, and businesses are free to set their own prices and profit margins.
If this or any Govt. is really interested in collusion and price gouging they should turn their attention on the Petrol Companies:
Many years ago I wrote to the ACCC about the regular price cycling by ALL the petrol companies (something that’s still happening now: where petrol prices suddenly jump ~40cents/liter, and slowly trickle down) and the ACCC’s response was to fill up when prices were low: Pretty useless advice if you need petrol when the prices have jumped:
Last year I visited a friend in Hungary (which is no-longer a communist country) and was surprised to find that the price of petrol was the same EVERYWHERE, by every petrol company, in other words, the Govt. set the price.
But this doesn’t seem to be a concern by any of our Govt’s or politicians, because they get a car and free petrol.
ACCC, you should have saved your time..... they are a toothless tiger. Absolutely hopeless, a waste of time..... from my experience.
 

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