As the cost of living continues to rise, Australians are feeling the pinch at the checkout. The topic of supermarket pricing has become a hot-button issue, especially with Prime Minister Anthony Albanese’s recent proposal to introduce legislation aimed at cracking down on excessive supermarket prices. This move has sparked a heated debate between the government and the country’s leading supermarkets, Woolworths and Coles.
The proposed law, contingent on Labor’s victory in the May 3 election, seeks to prevent prices from becoming exorbitant, particularly for in-demand products. However, Woolworths and Coles have urged the government to address what they consider the ‘real factors’ driving up grocery prices, such as rising costs for energy, fuel, labour, insurance, production, freight, and distribution.
In response to the government’s proposal, a Coles spokesperson highlighted that a 12-month inquiry into supermarkets by the government and the Australian Competition and Consumer Commission (ACCC) found no evidence of price gouging. Similarly, Woolworths pointed out that their cooperation with the ACCC’s extensive investigation also showed no signs of such practices.
The ACCC’s 441-page review of Australia’s supermarket ecosystem acknowledged that while Coles and Woolworths had increased their price margins, these were not deemed ‘excessive’. The watchdog also refrained from labelling the industry a duopoly but noted that Australia has less competition compared to other countries, which adversely affects consumers.
The Australian Retailers Association (ARA) echoed the supermarkets’ sentiments, attributing inflation at the checkout to higher costs of wages, energy, and fuel. The ARA called on the government to implement policies that reduce the cost of doing business, which would, in turn, impact grocery prices and the cost of living for Australian families.
On the other side of the debate, the Australian Council of Trade Unions (ACTU) expressed disappointment at the supermarkets’ opposition to Labor’s plan. ACTU Secretary Sally McManus criticised Coles and Woolworths for their profit margins and lack of concern for customers under financial pressure.
Labor’s plan to address price gouging involves introducing regulations similar to those in the European Union and some US states, which prevent companies from abusing their market dominance. Under the proposed law, supermarkets could face significant fines for non-compliance. However, defining what constitutes price gouging remains a challenge, as the ACCC’s definition is not explicit.
Both Coles and Woolworths are currently facing Federal Court action over allegations that they misled consumers with their ‘Down Down’ and ‘Prices Dropped’ promotions, accusations they both deny.
While opinions differ on the causes of rising supermarket prices, one thing is certain—many Australians are feeling the impact. Whether it’s legislation or market changes, finding solutions that work for both consumers and businesses is essential.
What’s your opinion on the proposed legislation to address price gouging—do you see it as a practical solution? How have grocery prices impacted your household budget, and what changes would you like to see? Join the discussion in the comments!
Also read: Are Australia’s most profitable supermarkets playing fair? The ACCC weighs in
This is Labor deflecting the real issue. The supermarkets have just been under a year long review – no gouging. Their profit as a percentage of turnover is about 3 % – which other businesses work on that margin? There is competition – go shop at the local butcher or IGA – but they are more expensive. The real issue is labor poor management of the economy which has driven up input costs. Sadly the people will believe Albo is doing something real – which he is not.
Rubbish. Must be an election coming as all the trolls are out.
Insurance, which has little in the way of labour costs, is a huge problem for everyone including these supermarkets. Insurance companies are not big employers or consumers of energy etc but insurance costs have risen at many times the rate of inflation forcing up the cost of everything else.
The other thing affecting retailers is the big increase in shoplifting as the cost of living influences people to take a few freebies to help them get by. The super markets don’t seem to do much about preventing people walking out with out paying for some or all of their purchases. In fact they have made theft easier by installing self checkouts. These losses would be significant and honest shoppers then face higher prices to cover the dishonest ones most of whom don’t even care if they get caught because they just walk away.
I agree with AllanM . but then again no one plays fair .not the supermarkets ,service stations etc . its all about the money .it seems there is never enough for some people .
The idea that the Government can in any way control the prices that the supermarkets put on their produce is ludicrous. Whilst the claims that the supermarkets have marked up prices one week and then bring them back down to claim a reduction is hard to prove as with all lines, there are many layers of costings that the consumer doesn’t see.
The supermarkets have nearly all of their suppliers (yes, even the big legacy brands) under pressure to do more for less.
Meanwhile all levels are facing consistent increases in power and Government compliance charges.
The supermarkets do charge the suppliers for shelf space and charge more for the eye level display and who ever will pay more can get the optimum location.
In store stock shrinkage is a problem that can be linked to the socio-economic suburbs nearby. The supermarket staff have been advised to avoid confronting their known thieves as many are users of non-prescription pharmaceuticals that lead to unpredictable reactions to staff interventions.