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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I worked for many years with Coles, Woolworths and Aldi. Aldi were so much easier and honest to work with than the Big 2 who tried to screw every cent they could out of the Manufacturers and farmers. They showed little care about these businesses and never gave their customers a thought. They never made anything like a $billion profit either! Covid was the best thing to have ever happened to them. It was like someone granted them the right to overcharge at will.
Be interested where you get your figures. Aldi (Aust) 100% Germany family owned business. Aldi isn't a listed company, but their tax 'return' last fin year showed a $10b turnover and for Australia, only paid tax on just under $1b, not any different to the 2 big boys. Which by the way pay dividends most of which is to superannuation accounts, not the pockets of 1 family (in top 5 richest in Germany).
 
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I find it hard to believe how Cole’s & Woolworths can have so many weekly specials offering 50% off . i.e Dish washer tablets normal price $52, special price $26, soup$4.40, special price $2.20, 10kg rice normal price 38.00 , special price $19 - and the list goes on. Why can’t they reduce the prices to a reasonable price,every week as you can be sure they are still making a profit selling the items at half price.
 
Why the hell pick on the lowest ones first the ones you need to hit are Coles and Woolworths first then go down the list
 
I shop at Aldi regularly and find their pricing on most products to be competitive, but in their fresh produce I find them to be on the same level as the other 2 major retailers, price wise ,(ie the same price). Smaller Green Grocers found in shopping centres are usually cheaper for fresh fruit & vegetables.
 
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I find it hard to believe how Cole’s & Woolworths can have so many weekly specials offering 50% off . i.e Dish washer tablets normal price $52, special price $26, soup$4.40, special price $2.20, 10kg rice normal price 38.00 , special price $19 - and the list goes on. Why can’t they reduce the prices to a reasonable price,every week as you can be sure they are still making a profit selling the items at half price.
That's exactly what the suppliers are complaining about. If a supplier wants their product to be on 'special' then Coles & Woollies expect them to supply on the basis of buy 1 pallet of dishwashing detergent and get another for free. It's called a loss leader, the suppliers product then out sells the higher priced alternative product. The price paid buy C or W is then passed on to the consumer as a 50% off price, or buy 1 get the other free. It's called competition, otherwise the 2 big boys would then be accused of price collusion as their prices would be exactly the same using the same margin formula.
 
What always amazes me is that the unions are always asking for higher wages so what happens when they get these wage increases? Prices in any store goes up so it is a case of a cat chasing its tail. The cost
of the extra wages then becomes a cost to the business and so it goes on. The higher the wages go up so does the store prices.
 
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?
Retail prices in supermarket chains are actually controlled by suppliers not the supermarket chains. The suppliers (farmers etc.) have the right to increase their prices when they feel it is appropriate which results obviously in a retail price increase. The home brand products are controlled by the supermarkets and that is why they are cheaper. Look to the suppliers for the answer to price gouging.
 
So there is a senate inquiry,, more of tax payers money gone on a wasted inquiry... these companies are in the pockets of the these party's or visa a versa ... Then the is going to be a year long inquiry by the toothless tiger ACCC ,, more waste on tax payers money.. The ACCC is a toothless tiger against these multi national corporations ... How many inquiry's have ACCC had into the multi nation petrol companies and what happen ,,Nothing...
 
Are people aware that when it comes to shelf stock ,supplier has tp pay a price to have his stock put on a particular shelf
Yes being a sales rep years ago, suppliers pay a small fortune for the display promotion areas at the end of the aisles.
 
prices were considerably lower 9 years ago.
And that is supposed to be a valid argument? LOL that is hilarious! Prices of EVERYTHING were lower because prices do NOT stay stagnant. My rent was cheaper nine years ago, pharmaceuticals were cheaper, everything was cheaper ... but still, NOTHING was done then to curb inflation.
 
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Woolworths and coles have price gouged for as long as I can remember and I am 67, this is why as soon as Aldi opened its doors I became a customer.
Nothing is mentioned about Bunnings. They are a monopoly, and rip off their suppliers. The suppliers have no where else to go.
 
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!
And where would you suggest they go? IGA is very expensive and doesn't have much of a range. Aldi mostly sells home brand.
 
I feel so sorry for the farmers, and producers, my brother was a farmer he had an orange orchard. The amount of fruit he ploughed into the ground was heartbreaking. I remember a couple of years ago i was at Woolworths I always look for Australian made or produced. The sign under the oranges said a product of EGYPT and USA I was gob smacked and mentioned it to a worker unpacking food.
Money hungry supermarkets. wouldn't it be good if the livestock farmers and fresh food producers got together and opened their own supermarket.
 
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The BS is about to start flowing thick and fast. While they are at it, they need to address overtime rates that aren't paid. I worked for Coles for 10 years and did an average of one hour overtime daily, unpaid for all of that 10 years. That's over 3000 hours of unpaid work all in the name of their massive profits.
 
noticed how woolies and coles have all of sudden started lowering prices and telling us how low they have made their prices, lowest this product has been in ten years one ad said.....funny thing that!
 
Are people aware that when it comes to shelf stock ,supplier has tp pay a price to have his stock put on a particular shelf
the supermarkets actually charge, rent for the space their product uses in each store, this alone could actually allow the big stores to actually sell the goods at cost or near, and still make a profit...each shelf is like a piece of real estate (and priced the same) paid by the supplier...and its thousands and tens of thousands
 
Woolworths prices change constantly.their vegetables section prices and quality is shocking.i buy woollies every week and prices change regularly some not by a few cents i mean dollars.by the time the veges are home(that day) they are wilting.e.g spinach.had only one bunch left.had to discard half of it.
 

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