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

I second this excellent bill, and I would add that the government must do something about grocery prices because it is simply unconscionable that Woolworths and Coles rake it in while Australians go hungry or are struggling so hard to pay for a roof over their head or to put fuel in their vehicle. I'm sure we all understand that increased competition means decreased prices, but Coles and Woolworths constitute a whopping 65 per cent of Australia's grocery market, and there is little reason for them to drop their prices—and it shows, with Coles reporting $1.1 billion in profit between 2022 and 2023, while Woolworths posted a thumping $1.62 billion profit on an operating margin of six per cent. This is nearly double the margin enjoyed by some supermarkets in the more competitive UK market. No wonder the price of food in Australia is far too high and getting higher.

But don't just take it from me, because the numbers speak for themselves. For instance, the ABS noted that the price of food and non-alcoholic beverages rose 4.4 per cent in the 12 months to January, which is well above the average monthly CPI, which rose just 3.4 per cent. According to Foodbank's hunger report, 3.7 million households experienced food insecurity just last year, 10 per cent more than in 2022. Nor does the pain extend only to households, seeing as how a Senate committee inquiry into supermarket prices heard in Hobart earlier this month that some fruit and vegetable growers haven't received a price increase from supermarkets in 15 years. How farmers can be left to suffer in this way while Coles and Woolworths grow their profits is just beyond me.

Yet, as much as this feels like a crime, Coles and Woolworths can get away with it largely because of ineffective competition regulation and enforcement mechanisms. Indeed, as former chair of the ACCC Rod Sims put it, the Food and Grocery Code of Conduct is 'deeply deficient' because it's voluntary and there are no penalties for breaching it. The result? Supermarkets can and do keep holding their suppliers to ransom. Yes, the announcement by the government of an ACCC inquiry into supermarket pricing practices is welcome, but what we really need is a body that can identify and stamp out wrongdoing without having to wait for the government's say-so.

Now, it would be unfair to discuss grocery prices without acknowledging other price pressures, like COVID; natural disasters, including bushfires and floods; and, of course, international conflicts. But that is no excuse for us to let the supermarkets off the hook while Australians continue to resort to dumpster diving and skipping meals. No, we must instead legislate reform to the grocery market immediately, including by establishing regulation and accountability mechanisms which encourage competition and fairness.

This is why I rise to second the member for Kennedy's bill, which would reduce the market share of any supermarket to no more than 20 per cent, via enforced and progressive divestiture over five years. This may sound like a drastic measure, but the fact is that this bill was first introduced 10 years ago, and 10 years later the problem still has not been fixed. In fact, the situation is even worse, demonstrating clearly that governments, indeed this parliament, must stop tinkering around the edges and instead make bold changes to the supermarket sector. To do anything less makes a mockery of all the handwringing over the cost of living and the importance of the public interest.

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