Supermarket duopoly gone too far

Australian shoppers feel they are losing on price and variety in supermarkets. A survey conducted on behalf of independent grocery retailers by Master Grocers Australia (MGA) found that 72 per cent of survey respondents believe that the duopoly of Coles and Woolworths has gone too far.

Around 75 per cent of respondents believe that more competition is needed to boost the $88 billion grocery market, and tougher laws are a necessary part of that. Only 22 per cent believe the competition between current supermarkets is “healthy”.

An overwhelming majority (80 per cent) of respondents also said that it was “very” or “fairly” important for the Australian Competition and Consumer Commission to have legal power to enforce its charter, including ensuring competitive price behaviours.

Currently, Woolworths and Coles-owned Wesfarmers account for almost 80 percent of supermarket sales, 60 per cent of alcohol retail, 50 percent of petrol retail and 40 per cent of all retail in Australia. This high market share puts the supermarket giants in a dominant position over their suppliers and smaller independent retailers. MGA chief executive Jos de Bruin said this was a result of the existing competition laws.

Mr de Bruin said, “This survey shows a large majority of people believe there is something wrong with this state of affairs…They are concerned that they are the losers in terms of price and they want much more choice and variety.”

The survey came ahead of yesterday’s release of the Harper Review, in which the Government promised to take on changes to Australia’s competition law and to curb the major supermarkets’ power with an “effects test”, which would prevent large companies from misusing their market power.

ALDI, the next largest supermarket chain, controls more than 215 stores in Australia, with 80 per cent of its products being made in Australia. However, the German-owned company has faced criticsms over its use of sweatshop labour, worker exploitation and issues with palm oil supply. 

Read more at SMH.

Read more at Shop Ethical

What do you think? Would you like to see more competition when it comes to Aussie supermarkets or are you happy with the pricing and variety currently available?

Written by ameliath