Who’s to blame? Coles points fingers over high prices in Senate inquiry

Have you noticed your grocery bills increasing lately? You're not alone. The cost of living is a hot topic for Australians, especially for those in their golden years who are trying to stretch their retirement savings.

But who's to blame for these rising costs? According to Coles, one of Australia's largest supermarket chains, it's not them.

Instead, they're pointing the finger at suppliers and farmers.


In a recent submission to a parliamentary inquiry on supermarket prices, Coles revealed that they have been receiving an average of more than 70 requests weekly for price increases from suppliers and farmers.

This is almost double the number of requests they were receiving just a few years ago.


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Coles is now under a Senate inquiry due to accusations of price gouging under a cost-of-living crisis in Australia. Image: Youtube


Coles suggests that they too are grappling with the same cost pressures that households are facing.

Increased energy, labour, logistics, and packaging costs are all contributing to the rising prices of goods.

Coles told the inquiry, led by Greens Senator Nick McKim, that for every $100 of operating revenue earned, they need at least $73.09 to be spent on buying and getting the products to stores, with the majority of this money going to suppliers.

The next highest expenditures are the wages and benefits, accounting for $11.87 out of every $100.


‘We highly value these long-term partnerships and it is our ambition to continue to build on these successes and contribute to the long-term sustainability of our valued suppliers,’ Coles said.

The supermarket giant also said that its suppliers are subject to the same cost pressures that households in Australia are having trouble with.

‘We work constructively with our suppliers on promotional campaigns to offer great value to customers and to limit or defer the impact of supplier cost price increases to keep costs low for customers,’ the submission said.


However, not everyone agrees with Coles' explanation as leading economist and former Australian Competition and Consumer Commission (ACCC) Chairman, Allan Fels, has suggested that supermarkets are among the businesses that overcharge consumers by leveraging a lack of competition in the market.

He noted that when costs rise, business prices skyrocket, but when they fall, prices are very slow to come back down.

The ACCC has been keeping a close eye on the supermarket industry for many years, investigating allegations of anti-competitive behaviour and price fixing.

However, proving these allegations can be difficult, and the ACCC has often been criticised for not doing enough to protect consumers and small businesses.


Meanwhile, Coles was also accused of doing some sneaky changes to their supermarket aisles before the said senate inquiry.

While it's clear that there are many factors contributing to the rising cost of groceries, it's also clear that more needs to be done to ensure a fair and competitive market.

This includes holding supermarkets accountable for their pricing practices and ensuring they are not abusing their market power at the expense of suppliers, farmers, and ultimately, consumers.

Key Takeaways
  • Coles has cited requests from suppliers and farmers for price increases as a major factor driving up supermarket prices.
  • The supermarket has experienced a significant increase in the number of requests for higher prices, coupled with rising costs in energy, labour, logistics, and packaging.
  • Coles has explained that out of every $100 of operating revenue, a significant majority is spent on purchasing products and getting them to stores, highlighting the role of suppliers in the chain.
  • There are claims by economists that a lack of competition allows supermarkets to overcharge customers, with a suggestion that price reductions do not occur as quickly as price increases.

What are your thoughts on this issue, dear readers? Have you noticed a significant increase in your grocery bills?

Share your experiences and thoughts in the comments below. We'd love to hear from you!
 
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Still doesn’t explain who a lot of products doubled on price after Covid . Someone is spreading a lot you 🦬💩💩, farmers are complaining big business is squeezing them and the workers wages have been screwed for the past 10 years . 🤷🏻‍♀️🤷🏼‍♂️. Go figure
 
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Reactions: melnugro
Who to believe.....Coles blame farmers and farmers blame Coles !!
Get your acts together 😡😡😡
 
Cones/Woolworths both are thieving bastards lay blame at the farmer's and logistics as they have contracts with these companies and they can shop around for better prices on deliveries the billion dollar profit companies are crying poor piss of you slimy parasite bastards 🤬🤬🤬🤬🤬🤬
 
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Reactions: relljube and SandyM
I would like them to explain how they made over $1 billion in profit in the last financial year if they spend 85.06% of their income on product & wages. From the remaining 15% they would have to pay electricity, insurance, rent, maintenance. Don't make me laugh. Those figures are absolutely impossible to believe. So, Coles & Woolies, stop price gouging the shopper & denying the farmers a living income. Remember, they too have to pay electricity, water, rates, insurance, maintenance & wages & still hope to make a profit which allows them to expand their business.
 
Noticed no figures on how much operating revenue goes to shareholders.
How much is it actually costing for staff to walk around picking out customers' orders. I have had groceries delivered when I couldn't leave my husband. No way was I paying enough to cover these costs.
Everyone who shops are covering the cost on their grocery bill. Those who really needing the service could or would be happy to pay a little more. The others can get up and go do their own shopping.
 
  • Wow
Reactions: wendell
If there is no collusion, why is the price of variable cost items such as meat, dairy, fruit and vegetables the same a both supermarkets? Aren't they doing their own negotiations with different suppliers? And logistics is within their own businesses so there must be ways to do it better under their own roof. Instead they do the easy thing and put up prices and reduce staff costs except for head office personnel.
 
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Reactions: Jennie
If there is no collusion, why is the price of variable cost items such as meat, dairy, fruit and vegetables the same a both supermarkets? Aren't they doing their own negotiations with different suppliers? And logistics is within their own businesses so there must be ways to do it better under their own roof. Instead they do the easy thing and put up prices and reduce staff costs except for head office personnel.
Coles - Woolies and IGA etc watch each other and price match all the time - nothing to do with where they get their supplies.
 
Who to believe.....Coles blame farmers and farmers blame Coles !!
Get your acts together 😡😡😡
I don't believe it is the farmers making billions. We know Cole's is so as far as I am concerned that is where the fault lies and instead of all this talk and investigations into these companies, it is more than time something was done to bring about change to stop it.
 
My husband used to work in the fruit & vegetable distribution centre for Woolworths. He worked there for 21 years, before they were all made redundant during covid. Woolworths "agree" on a price with the growers, but when the delivery truck arrives Woolworths tells them that they will pay them less than previously agreed upon - "take it or leave it"! Most farmers/growers have no say in how much they will be paid for their produce, they have to take what they are offered. Or they can look for another buyer - or return with a full truck!
 
How is it the German-owned supermarket is always left out of the equation, going by the tax paid their profits are many times that of Coles and Woolworth, IGA are mainly independently owned by Ma and Pa investors and due to their purchasing quantities are relatively small they are unable to sell cheaply
 
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Reactions: Agave
Coles & Woolies.
If you make such meagre profit margins as you pointed out, then minus your overheads, because they were not mentioned, then please explain your overall sales so that profits, after tax, can be in the billions. It just does not compute. Any business running on the profit margins that you infer, would be insolvent within a very short time. How can you keep telling the public all this idiocy and expecting them to believe it. You are not doing yourself, or your company any favours. No-one believes a word you say now, so how do you expect them to believe anything further that you tell this inquiry.
 
they pay the Farmers a pitance. Farmers should get together to form their own organisation . This government is doing nothing to stop the gouging, they said competition brings down prices, but when you have a dualopoly then it clearly doesn't . Government needs to get their act together and break up Coles and Woolies, They own the petrol , the Alcohol , the food. this is not competition.
 
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Reactions: SandyM

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