Key Points
- The ACCC will conduct a year-long investigation into the supermarket industry.
- The inquiry is expected to focus on the differences between wholesale and retail prices for fresh produce.
- Further funding will also go to consumer group Choice to provide information to shoppers on supermarket prices.
The consumer watchdog will carry out an inquiry on supermarket prices, examining whether consumers are paying too much at the checkout.
In a speech to the National Press Club, Prime Minister Anthony Albanese announced Treasurer Jim Chalmers would direct the Australian Competition and Consumer Commission (ACCC) to conduct a year-long investigation into the supermarket industry.
The inquiry is expected to focus on the differences between prices paid for fresh produce by major supermarkets from farmers and what customers pay in store.
It will also look at how online shopping and loyalty programs as well as technology are affecting competition in the industry.
It comes as the on fruit, vegetables and meat.
"When farmers are selling their product for less, supermarkets should charge Australians less," Albanese said.
"The ACCC has significant powers, and it is the best and most effective body to investigate supermarket prices."
National Party leader says Labor was 'shamed' into inquiry,
Nationals leader David Littleproud accused the government of being "shamed" into calling the inquiry after consumers faced months of pressure.
"The Nationals tried to bring forward the much-needed review more than a year ago and support big stick legislation that included increased penalties and divestiture powers back in 2022, but we were ignored," he said.
Littleproud as, unlike a federal inquiry, the competition watchdog has the power to compel participants to provide evidence and enforce penalties if the law has been broken.
"Labor must now get cracking and give farmers and families the answers they need and deserve."
ACCC promises to use full range of powers in inquiry
ACCC chair Gina Cass-Gottlieb promised the watchdog would use its full range of legal powers to examine the supermarket sector and carefully consider recommendations to government.
"We know grocery prices have become a major concern for the millions of Australians experiencing cost of living pressures," she said.
"When it comes to fresh produce, we understand that many farmers are concerned about weak correlation between the price they receive for their produce and the price consumers pay at the checkout."
The ACCC says it expects to publish an issues paper in February seeking views on the key issues it will consider in the inquiry. An interim report will be provided to the federal government later this year, and the final report is due to be provided early next year.
“We believe we are well placed to conduct this broad-ranging inquiry and will bring to bear our expertise in competition, consumer law, agriculture and the supermarket sector in particular,” ACCC deputy chair Mick Keogh said.
Both Woolworths and Coles have said they would assist the ACCC with its inquiry.
Consumer advice group to receive funding boost
Albanese said the government would also give further funding to consumer group Choice to provide information to shoppers on supermarket prices.
"Across thousands of products, it can be hard for people to find the best deal. We are backing Choice, renowned for their commitment to consumer fairness, to provide regular information on prices across a basket of goods," Albanese said.
"This will promote transparency, enhance competition and drive value."
The consumer watchdog inquiry follows a review into the food and grocery code of conduct, being overseen by former Labor minister Craig Emerson.
The code of conduct regulates the conduct between supermarkets and suppliers and is voluntary, but the review will look at whether it should be mandatory.
A separate Senate inquiry is also expected to start hearings in February on prices at the supermarket checkout.
