Supermarket price gouging should be made illegal and there should be divestiture laws to create powers to break up Australia’s “supermarket duopoly”, a Senate inquiry has suggested.
The Senate inquiry on supermarket prices, led by environmentalist political party the Greens, today (7 May) released its final report which contained 14 recommendations including powers to break up big supermarkets and a strengthened food and grocery code of conduct.
Greens Economic Justice spokesperson and committee chair Senator Nick McKim said that this is a “landmark” report to rectify “so much harm” that has been inflicted on the people of Australia.
He said: “The committee has produced concrete steps that would tackle these problems head on.”
The main recommendation is that price gouging, the practice of substantially raising prices above costs of production and investment, should be made illegal.
McKim said: “This would mean that corporations couldn’t just arbitrarily increase prices without facing consequences from the courts. This would be a significant new power to stop unreasonable pricing that has been rampant for years because of a lack of competition.”
The inquiry, first announced in December, was mainly focused on Coles and Woolworths, which collectively control around two-thirds of the market. German retailer Aldi has a share of just over 10%.
Earlier this month, an interim review led by former Minister for Small Businesses, Dr Craig Emerson, called for the Food and Grocery Code of Conduct to be made mandatory. The inquiry has also pushed for this to be enforced.
The Greens-led inquiry has also recommended “divestiture powers for the supermarket sector, which would give the Federal Court the power to break up corporations when they abuse their market power or act unconscionably”, according to McKim.
However, the ruling Labor government is opposed to the market break-up recommendations.
McKim added: “The Greens established this inquiry to bring food prices down and that is exactly what our recommendations will do. We’ve heard from farmers and suppliers about how the massive market power of Coles and Woolworths is allowing them to act unconscionably.
“Without the ability to break up the duopoly, our market will remain skewed towards the interests of a few powerful players and nothing will change.”
Other recommendations from the report include supermarkets having to adopt mandatory standards for unit pricing to help prevent shrinkflation and the government standardising discount and promotional terms, to prevent supermarkets from promoting fake discounts.
Just Drinks has contacted Coles and Woolworths for comment.
