Andrew Wilkie (Clark, Independent) Share this | Hansard source

There's no denying that Australians are feeling the pinch right now. Whether putting a roof overhead, filling up the car with fuel or going to the doctor, the cost is being felt and felt hard. Nowhere is this pain being felt more regularly than on the trip to the supermarket for the most basic of things, like food to feed the family. Indeed, according to an article published earlier this month by the Conversation, food prices have risen sharply since 2021, with some 3.7 million Australian households experiencing food insecurity in 2023, 10 per cent more than the previous year. Moreover, in its submission to the Senate select committee's inquiry into the price-setting practices and market power of major supermarkets, the Department of Agriculture, Fisheries and Forestry noted food and non-alcoholic beverage prices were 4.5 per cent higher than the previous year. This, the department observed, showed food prices had risen faster than prices in the economy more broadly.

Of course, there are many factors contributing to the rising cost of food, including COVID; climate events, including floods and bushfires; and international conflicts. Events such as these often fall outside of our immediate control, but an area where the government can make a positive and immediate difference in reducing the cost of living is by reining in the supermarket duopoly that has dominated the food retail market for way too long. The undeniable fact is that, whereas other countries have multiple major retail food outlets increasing competition and therefore lowering prices, in Australia Coles and Woolworths dominate the Australian market. Indeed, the two major supermarkets control at least 65 per cent of Australia's grocery market, which, as reported in the recent, damning episode of Four Corners, means that, on average, for every $10 Australians pay for groceries, more than $6.50 is spent at Coles and Woolworths.

It's no wonder, then, that the big two have reported record profits in recent years—for instance, $1.1 billion and $1.62 billion for Coles and Woolworths respectively in 2022-23. Moreover, Woolworths's latest report shows that its pretax profit last financial year rose from 5.3 to six per cent, worth an additional $318 million, at the same time that the cost of doing business was flat. So, while people are paying more and struggling desperately to put food on the table for their families and while producers and farmers are grappling to keep their doors open and earn a liveable income, Coles and Woolworths are raking in the big bucks, and that is simply unconscionable.

But it hasn't happened in a vacuum. Coles and Woolworths actually haven't been doing anything beyond what successive Australian governments have allowed them to do. In other words, ineffective regulations and enforcement mechanisms have got us to where we are now. For example, as former chair of the ACCC Rod Sims noted during the Four Corners episode, the grocery code of conduct is a disgrace. It's a code with no penalties. It's like having a speed limit of 60 kilometres per hour but no penalty for someone who does 80. Moreover, our inadequate consumer laws do little to stop the duopoly engaging in practices such as unfair pricing, misleading conduct regarding 'specials' and undercutting producers and suppliers, with minimal consequences.

What makes it worse is that the ACCC isn't equipped with the power to respond. Indeed, as noted by former ACCC commissioner Allan Fels, the ACCC's powers to investigate overcharging by the major supermarket chains are limited unless requested by the government. Hence, it was welcome when the government announced last month that it would direct the commission to conduct an inquiry into Australia's supermarket sector, including their pricing practices and the relationship between wholesale, farm-gate and retail pricing. This inquiry goes hand in hand with five separate inquiries into the sector. No wonder Woolworths announced just this morning a price drop on 400 items. That's after we appeared as pigs.

Also welcome—in fact, especially welcome—is the member for Kennedy's bill to reduce the market share of any supermarket to no more than 20 people cent via enforced and progressive divestiture over five years. I guess that might sound dramatic and unrealistic to some people, but I'm very happy to second the bill, our second go at it, because the reality is that it's way beyond time to stop fussing about and instead take a sledgehammer to the nut.

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