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