TRANSCRIPT:
Australian apples may be in season and in high demand - but growers like Ian Pearce says their profits are on the decline.
"The returns have been pretty miniscule in recent years. Like for Gala apples, we haven't seen an increase in price for probably 12 or 13 years and in that time our labour costs have gone up about 52 per cent. So, tough at our end and at the consumer end prices seem to have gone up quite a bit at the retail level."
Shoppers say they're feeling the pain too.
Many shoppers say there needs to be more accountability for the significant price increases amid a cost-of-living crisis.
VOXIE 1: "It is pretty ridiculous at this point."
VOXIE 2: "They're ripping us all off, especially the farmers and small independent people"
VOXIE 3: "I think they should be fined and even imprisoned for price gouging. In other industries people are held accountable. Times are tough and we deserve a break."
Coles and Woolworth both posted billion-dollar profits last year, prompting accusations of price gouging.
Now, a review into the relationship between supermarkets and suppliers recommends making an opt-in code of conduct mandatory for the sector.
Treasurer Jim Chalmers has welcomed the report, arguing its recommendations will increase accountability.
"This is all about a fair go for farmers and families. It recognises that by replacing a voluntary code with a mandatory code it's easier to enforce, we can impose penalties on people who are doing the wrong thing, and it's also harder for people to walk away from."
The proposed changes will see breaches to the code of conduct punishable by fines of up to $10 million, or 10 per cent of a company's annual turnover.
For Coles and Woolworths that would represent more than $4 billion dollars.
Former Labor Minister Craig Emerson, who led the supermarket review, says the harsh penalties will help to discourage unethical behaviour.
"Surely if you've got the ACCC breathing down your neck and threatening to go to court, you'd probably change your behaviour so that you didn't have to have such a high-profile court case with such high penalties at risk. If such a fine was applied by the courts, it would have to be pretty much the biggest in corporate history in Australia and its really for systemic, nasty egregious behaviour."
National Farmer's Federation president David Jochinke says some of this egregious behaviour allegedly includes the intimidation and black-listing of farmers who speak up about unfair pricing.
"What we're hearing from our members is that they're frightened to speak up, hence why we are supporting of protections for people who are calling out bad behaviour when they're just wanting to run decent businesses under decent terms and conditions. And that's what a mandatory code will do."
Combined, the two giants control two thirds of the market.
Coles says it's proud to support the code, while Woolworths says they're onboard too - but want the rules applied to other major retailers like Amazon and Costco.
The independent review stops short of suggesting the introduction of divestiture powers which could be used to break apart the supermarket duopoly of Woolworths and Coles.
The Greens and Nationals have both favoured the move, which could see the supermarket giants forced to sell off assets to reduce their portion of the market-share and encourage more competition.
Dr Emerson says he believes this approach won't work because the domestic competition lacks the ability to buy up these assets.
"Who are they going to sell 20 per cent of their stores to? You could say maybe a foreign supermarket, but they're not all going to flood in to buy up 20 per cent of the stores. So then you're looking at the following prospect which is those stores are closed because of forced divestiture, the workers lose their jobs for no fault of their own and the local shoppers in the local communities say 'Why did our Woolworths close?'. 'Oh, the government ordered it to be closed.'"
The Coalition and the Greens have rejected the findings of Dr Emerson's report.
Opposition leader Peter Dutton says the review has been a partisan exercise, while Greens Senator Nick McKim believes it does not go far enough.
DUTTON: "The review was written - the results were dictated by Jim Chalmers and I think this is a Mickey Mouse review that has been conducted by Labor the going to be priced to leave here for consumers."
MCKIM: "Dr Emerson's recommendations are applying a band-aid to a gaping wound and unless the concentration of market power of Coles and Woolworths is adequately addressed nothing will change."
