Monique Ryan (Kooyong, Independent) Share this | Hansard source

We know that our supermarket sector is one of the least competitive in the world. Coles and Woolworths control 65 per cent of our grocery market, and in some parts of the country it's actually over 90 per cent. For every $10 that Australians spend on groceries, $6.50 or more of that is spent on the big two. Last year Woolworths' costs of doing business were flat, but its profit margin grew from 5.3 to six per cent. Coles saw a small increase in costs, but its profit margin was still 4.8 per cent.

We know that the big two compete for customers, but there's often very little difference in their prices. In fact, we know that they often match each other. It's perfectly legal for businesses to charge prices far beyond what is considered reasonable or fair. That act itself is not illegal. But it is illegal for costs and prices to be coordinated amongst competitors. While no-one expects our supermarkets to go broke, equally no-one expects to be price-gouged on their weekly shop.

Competition is the key factor which impacts costs for consumers. Rod Sims, who was the head of the consumer watchdog, the ACCC, for 11 years, has said that the lack of competition in our supermarket sector means that shoppers are losing out, that the extreme concentration of the supermarket sector is inevitably leading to higher prices for us all. The profits that have been recorded by the two biggest supermarkets in our country have been labelled by people—experts like Rod Sims—as price gouging.

I've also heard from grocery suppliers and brand producers that they are being expected to fund specials and promotions of the supermarket as well as their in-house advertising and promotions, that the supermarkets control the supply chains and that the primary producers are effectively at their mercy and are struggling. We've also heard recently of the land-banking tactics of Coles and Woolies. This was one of the contributing factors to German supermarket chain Kaufland abandoning plans to enter our Australian market in 2020. We've heard from consumers that advertisements regarding 'locked prices' are misleading, that advertisements regarding discounts are inaccurate and that packet sizes are shrinking at the same time that prices are going up.

This government currently has half a dozen inquiries running nationally on the supermarket chains and how they deal with both their suppliers and their customers. But in a cost-of-living crisis customers don't have time for those inquiries to report, and we've seen time and time again how many government inquiries go nowhere. It's been clear for some time that the Food and Grocery Code of Conduct should be made mandatory. Membership should be enforced for retailers, and the rules of the code should apply to all retailers. There have been suggestions from both sides of the political spectrum that the ACCC should be given powers as a matter of urgency to enable it to compel retailers to reduce their control of markets.

Increasing supermarket competition won't necessarily improve farm gate prices, but it will improve them for consumers. The concept is worth exploring. I'm not at all convinced that divestiture, as being proposed by my parliamentary colleagues, is the answer. But we do need to find effective cost-of-living measures, and we need to find them as a matter of urgency. That's why I'm supporting my colleagues in this urgent motion to address this issue.

See this speech in context