Breakup of supermarket giants? Senate inquiry backs suggestions against price gouging

The Australian grocery landscape may go through a major shakeup if the government heeds the recommendations of a recent Senate inquiry.

This move could lead to more competitive pricing and better treatment of suppliers, ultimately benefiting consumers who have long felt the pinch of high grocery bills.


The Senate Inquiry backed a movement to dismantle the near-duopoly of Coles and Woolworths, which, together with ALDI and Metcash, command an 80 per cent share of the nation's grocery market.

Led by the Greens, the Senate Committee delivered a report accusing the supermarket behemoths of setting unfair prices and being 'driven by profits at the expense of consumers'.


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Major supermarkets may face consequences for alleged price gouging, affecting citizens amid a cost of living crisis. Image Credit: Pexels/Anna Shvets


In a bid to prevent alleged abuses of power, the report contained a recommendation which read:

'The committee therefore recommends that section 46 of the Competition and Consumer Act 2010 be amended to make it an offence to charge excessive prices, in terms similar to the European Union provisions.'

The inquiry's findings led to a total of 14 recommendations, including the introduction of divestiture powers.

These powers would allow the government to compel supermarkets found guilty of misusing their market power or engaging in anti-competitive conduct to sell off parts of their business.


The committee also urged the government to establish a Commission on Prices and Competition immediately.

This body will examine and regulate prices and push for fair price-setting practices within the industry if established.

The push for 'big stick' laws came in contrast to an interim review by former Labor minister Craig Emerson, which dismissed the need for a breakup.

Instead, Emerson's review suggested that supermarkets and suppliers adhere to a mandatory Code of Conduct enforced by severe penalties.

Prime Minister Anthony Albanese has previously dismissed the idea of divestiture laws and compared similar interventions to practices of 'the old Soviet Union'.

However, the Greens still introduced a bill that would grant the government the power to enforce the breakup of businesses to prevent anti-competitive behaviour.


Coles and Woolworths expressed opposition to the idea of divestiture.

A Woolworths spokesperson shared that the company will take its time to consider the report's recommendations.

On the other hand, a Coles spokesperson rejected the findings as it will 'adversely impact the operation of open and free competitive markets in the provision of food and grocery in Australia'.

Despite different standpoints, they supported an overhaul of the Food and Grocery Code of Conduct.


During the inquiry's public hearings, farmers' groups alleged that supermarkets profited excessively by marking down in-store product prices while offering farmers less for the same items.

Farmers also received the same prices for their produce from both supermarkets for over a decade despite rising production and living costs.

This coincides with a report commissioned by the Australian Council of Trade Unions, which highlighted that Australians are being exploited by unfair pricing practices by big businesses, leading to a cost-of-living crisis.

The Senate inquiry is one of several investigations into Australia's grocery sector, which has come under scrutiny due to concerns over high grocery prices and the increasing cost of living.

If the government acts on these recommendations, it could herald a new era of competition and fairness in the grocery industry, potentially leading to lower prices and better consumer deals.
Key Takeaways

  • A Senate inquiry suggested that Coles and Woolworths are setting unfair prices and abusing market power, negatively impacting consumers and suppliers.
  • The inquiry recommended amending the Competition and Consumer Act 2010 to make price gouging an offence. It also supported divestiture laws to break up supermarkets engaging in anti-competitive conduct.
  • Proposed reforms included establishing a Commission on Prices and Competition to scrutinise price-setting practices and creating divestiture powers for the Australian government.
  • Woolworths and Coles opposed the idea of divestiture laws, citing potential negative impacts on competitive markets, but supported an overhaul of the Food and Grocery Code of Conduct.
What are your thoughts on the findings of the Senate inquiry? Will this lead to better prices and fairer treatment for suppliers, or are you concerned about the possible consequences? Please share your opinions with us in the comments below.
 
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They have to do something about the price gouging. Suppliers and Producers of products should NOT be the ones to suffer. If they keep gouging from Farmers we won't have Farms to sell their products. So Supermarkets wake up to yourselves.
 
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They have to do something about the price gouging. Suppliers and Producers of products should NOT be the ones to suffer. If they keep gouging from Farmers we won't have Farms to sell their products. So Supermarkets wake up to yourselves.
The mantra in the buying office (from the top) is "WE WANT GOLD BRICKS FOR $1" With a lot of fists slamming into the boardroom table. " GO OUT THERE AND SCREW THE SUPPLIERS".
You have to understand that one of the KPI's of the buyers is what profit they can obtain....
As you know EVERYTHING Nowadays revolves around the holy $.... sadly....
 
the best tool to fix this situation is to invite other companies here or o'seas to compete....the natural greed inherent in all these cos will start to compete with each other which will end any collusion between them, the shrinking share of the market will bring out the greed in them to knock each other off resulting in bargains for the public without the need for communistic regulations
 
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