Supermarket inquiry the best reality television going around

Forget reality television, the senate inquiry into supermarket pricing hands-down beats whatever you are watching right now.

The standoff between Greens senator Nick McKim and Woolworths chief executive Brad Banducci yesterday was entertainment gold. You can watch a bit of it here.

If you didn’t catch it, basically it was Senator McKim asking the same questions over and over again with increasing hostility while Mr Banducci kept answering with whatever he wanted to say, which never answered the question. 

Senator McKim asked Mr Banducci 39 times what Woolworths’ return on equity was. And if that sounds boring, you are wrong. It was amazing.

“I put it to you that the reason that you don’t want to focus on return on equity is you don’t like the story [it’s] telling you, which is basically that you are profiteering,” Senator McKim said.

Somehow, I get the feeling Mr Banducci hasn’t been told ‘no’ in a while.

At one point Senator McKim threatened Mr Banducci with jail over contempt of court, which will almost certainly not happen, but has given the Greens senator plenty of traction in the media.

‘A bit spicy’

In later comments to the ABC, Senator McKim described the confrontation as “a bit spicy”. You don’t say.

While Mr Banducci said he didn’t know the answer, Senator McKim said an executive earning $8 million a year should know their return on equity.

“He’s pocketed about $66 million into his own pocket in terms of his salary and bonuses over less than a decade. I would have thought he would have known how profitable his company is,” Senator McKim told the ABC. He has a point.

Anyway, the actual point Senator McKim was trying to make was that the return on equity for Woolworths was about 26 per cent, and for Coles, it was about 31 per cent. For comparison, the average of Australian banks is about 10 per cent.

“Australia’s banks are some of the most profitable banks in the world. So, the supermarket corporations are making off like bandits here and all of those obscene profits are coming out of the pockets of shoppers,” Senator McKim said. 

Coles chief executive Leah Weckert took the opposite approach when facing the inquiry.

After disclosing Coles’ net profit was 2.6 per cent, she calmly took Senator McKim through all the metrics he had asked of Mr Banducci and explained how comparing supermarkets to banks was not an appropriate measure because banks must hold legislated levels of equity and had different asset types and levels.

I suspect Ms Weckert was the subject of some frantic briefing after Mr Banducci’s evisceration.

No real solutions

What did all this achieve? Great watching mostly and plenty of publicity for Senator McKim.

However, solutions to the duopoly’s market dominance are otherwise flimsy or unrealistic.

The Independent Review of the Food and Grocery Code of Conduct interim report, overseen by former Labor minister Dr Craig Emerson recommended some proposals that even he recognised were not enforceable. 

“Legally, a supermarket would be at liberty to refuse to agree to these arrangements. In so refusing, however, they would be judged harshly in the court of public opinion,” he said.

Dr Emerson wants a low-cost alternative to the courts for accusations of price gouging and recommended independent mediation and arbitration. 

Supermarkets would also be “strongly encouraged” to agree to pay compensation where recommended.

The report recommended multi-million dollar fines, but in no real-world situation would a business hand over that sort of money after being “strongly encouraged”.

The Greens’ solution is to break up the two major supermarkets, but the two major parties would never risk their relationship with big business by backing such a radical plan and, without their support, such a proposal is a good headline and nothing more.

Labor and the LNP make occasional sympathetic noises about the issue, but nothing to spook the big end of town. And both companies accept donations from Coles and Woolworths. 

What do you think is the solution to the supermarket market dominance? Why not share your opinion in the comments section below?

Also read: Supermarket pricing tactics lead to unhealthy choices, data shows

Jan Fisher
Jan Fisher
Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.


  1. Why is the government complaining about both Coles and Woolworths having dominant market positions? It was governments which enabled these companies to take over their once competitors such as Cash & Carry, Bi-Lo, Jewel, Fleming’s etc and they could have blocked them but it didn’t. Now they claim they are in the consumer’s corner but they enabled it.

    If they think by putting in more penalties and controls that this would appeal to bring another foreign retailer to the market then they can think again.

    It has also enabled our food manufacturing industry to be sold overseas has meant so we have little local product or price influence. One example, we sold Golden Circle overseas and moved local canning to offshore and we can’t even can our own local beetroots so we now pay higher priced imported products if you find them.

    • The problem is Cosmo is that the high costs associated with manufacture and supply in Australia, especially wages, have meant we simply cannot compete with products coming in fron overseas. The motor vehicle manufacturing industry is a classic example. That unfortunately, is the cost of a much higher living standard of living here than our overseas competitors.

  2. If you look at the supermaket chains in the UK (at least TEN of them) as well as european ones, you can see why Aussie shoppers are getting ripped off! The government should make it easier for these chains to open up here with a few generous tax breaks etc for the first few years to get established and get then right up the nose of our two major chains!!

      • Oh yes, so which Australian is going to do that then? Australians have given up in investing in themselves and has handed most over to the foreigners to run them. If Aldi can sell better fresh food and cheaper than Coles and Woolies and if as you claim send a profit overseas too, then they most be doing something right. Imagine how high prices would be if Aldi didn’t come here because Coles and Woolies still can’t beat them.

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