Louise Miller-Frost (Boothby, Australian Labor Party) Share this | Hansard source

Labor knows that cost-of-living pressures and, especially, the cost of groceries are putting Australians under the pump. Last year, this government put in measure after measure to provide cost-of-living relief: cheaper medicines, power bill supplements, cheaper child care, fee-free TAFE, a tripling of the bulk-billing supplement and much more. But, while Australians tightened their belts and this government worked to control inflation, it turns out that not everyone was on the same side. The two major supermarket chains in Australia, Coles and Woolworths, reported record profits. Coles' profit was up $1.098 billion, or 5.3 per cent, on the previous year and Woolworths' was up $1.62 billion, or 4.6 per cent, on its previous.

To be clear, this is profit. This doesn't reflect an increase in the cost of goods sold. It's not flowing through to the farm gate. The money isn't going to farmers or food producers. The money isn't going to freight or packaging. This is their profit after all the cost of goods sold is already taken into account. So where did the profit come from? Most Australian shoppers will be unsurprised to hear that this profit increase reflects grocery price increases. When the government is working to contain inflation and when Australians are tightening their belts to get inflation under control, these supermarket giants are fuelling inflation by putting up prices.

The recent Inquiry into Price Gouging and Unfair Pricing Practices, commissioned by the ACTU and undertaken by Professor Allan Fels, received 325 submissions on the subject of supermarket pricing, more than twice the number of submissions received for any other sector. Australians know about this issue and they care. Australia has a highly concentrated supermarket sector, with Woolworths and Coles accounting for around 65 per cent of the market, and this duopoly has meant limited competition and given them significant power not to reduce prices. The ACTU inquiry found that supermarkets were very quick to pass on any increase in their costs but very slow to pass on savings. An example given was that it took six months for the falling cost of lamb to be passed on to the consumer, and then it was positioned as a Christmas gift from Woolworths to shoppers, whereas in reality it reflected the lower cost of goods sold. If it was a gift from anyone, it was a gift from the farmers who were being paid less for their lamb. The supermarket had been enjoying the higher profit margin for the last six months.

The Albanese government has commissioned an ACCC review on supermarket pricing, an independent review of the food and grocery code. The ACCC inquiry will examine the competitiveness of retail prices for everyday groceries. The 12-month inquiry will consider the current structure of the supermarket industry at the supply, wholesale and retail levels; competition in the industry and how it's changed since 2008, including online shopping; the competitiveness of small and independent retailers, including in regional and remote areas; the pricing practices of supermarkets; factors influencing prices along the supply chain, and any impediments to competitive pricing along the supply chain; and other factors impacting competition, including loyalty programs and third-party discounts. The ACCC will provide their findings and recommendations to the government in early 2025, and we will work with them to ensure that shoppers are getting a fair deal.

The food and grocery code regulates business dealings between farmers, suppliers, wholesalers and supermarkets and addresses harmful practices in the grocery sector stemming from an imbalance of bargaining power between these groups. Through protecting suppliers against business behaviour that affects the growth and sustainability of the grocery industry, the code is intended to prevent harms being passed on through the supply chain to Australian consumers. Importantly for consumers, we are also providing choice, with $1.1 million to provide price transparency and comparison reports on a quarterly basis for three years so consumers can have clear information on the best place for them to buy their groceries. This will start from the second quarter of 2024 and provide shoppers with increased transparency on comparative costs of a basket of goods at different retailers. It will give Australians better information to make informed choices about where they shop. Groceries are a vital part of expenditure for every Australian household. I commend the government for commissioning the ACCC inquiry, and I'm sure all Australian shoppers will be very interested in the findings.

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