Louise Pratt (WA, Australian Labor Party) Share this | Hansard source

Our government, the Labor government, has moved consistently and quickly to address the pressures that consumers are facing in our nation. It was only back in February of this year that the Labor Party announced its ACCC inquiry, as well as the Emerson review into the cost-of-living crisis in supermarkets. That review has resulted in announcements just this week that a mandatory code of conduct will be enforced.

We know Australia's supermarket sector is among the most concentrated in the world. We know Woolworths, Coles and Aldi collectively have a 75 per cent market share, which is—as acknowledged by the proponents of this bill, the Competition and Consumer Amendment (Divestiture Powers) Bill 2024—a much higher share than exists in many other advanced countries, which is why the Labor Party has appropriately scrutinised this. It has absolutely been a high priority for our government. We saw just last week the results of the CHOICE quarterly price-monitoring exercise which was funded by the Commonwealth government. We funded CHOICE to the tune of $1.1 million to carry out quarterly price monitoring in every state and territory. Consumers should rightly have been alarmed at the significant price differences across jurisdictions and between supermarkets. It showed that in the jurisdictions where Aldi doesn't operate—Tasmania and the Northern Territory—shoppers are paying higher prices for their groceries. It showed the magnitude of gaps between the different supermarkets.

What's notable about this in the context of this legislation is that in a divestment situation, if you were to look at who would be in a position to take over stores should, for example Coles and Woolies be forced to divest themselves of their stores, in many cases the competing store is already there next door and is already offering higher prices. So, in fact, forcing Coles, for example, to divest itself of my local Coles supermarket and sell it to a competing store is not necessarily going to result in increased competition. It may actually decrease competition. That is one of the findings of analysis done by Minister Leigh and other academics. Notably, even though Aldi has considerably lower prices and you can see those price point differences, Aldi themselves said to our supermarkets inquiry that they don't support divestment powers. So, we've had to get on with looking very carefully at how we can make a difference to both consumers and farmers. Our ACCC inquiry has looked at issues such as loyalty card discounts. One of the biggest impacts of concentration is indeed on consumers, so the ACCC, in looking at things like loyalty discounts, is there to ensure that shoppers are able to get a fairer deal.

One of the significant stories we heard during the course of our Senate inquiry was the devastating impact on many suppliers, in particular suppliers of fresh fruit and vegetables and other fresh goods, as well as nursery suppliers to Bunnings. The key issue here regarding their bargaining power, in that they are just price takers, is the fact that their produce is fresh and has a short shelf-life. And it was absolutely alarming to see, time and time again, that farmers and producers did not feel comfortable talking openly to our inquiry for fear of retaliation and backlash from Coles and Woolworths. Often they did not feel able to tell us what was really going on. But we did have a few brave souls step forward who were able to explain to us the kinds of practices displayed by Coles and Woolworths. They said they are at the mercy of Coles and Woolworths as price takers and that it has created enormous difficulty for them.

We recognise that we've heard too many of these troubling tales, even despite the fact it has been difficult for them to come forward, about suppliers to the major supermarkets not getting a fair crack. Those suppliers have been unwilling to make complaints because of fear of reprisals, fear that they simply won't get a contract the next time. However, under the former government, the Food and Grocery Code of Conduct was set up as a voluntary code, without the appropriate penalties to see appropriate powers given to producers inside that code. In effect, many producers were simply unwilling to use it.

The leader of the National Party was harping on previously, saying, 'Oh, dear: why didn't the government move to make it mandatory?' Well, that's why we are doing that. We are doing what the last government failed to do in nine long years of government. They simply didn't do the work to support the primary producers they purport to stand up for. Not only did the coalition set it up as a voluntary code, but also they had held a review on it. And the former government decided after their review that it should be a voluntary code. So, when those opposite say, as Senator Davey did, that they support divestiture powers, I tend to think it's a fair bit of hot air on their part.

If we really thought divestiture powers were the way to go on this front—and those opposite did think that—then there are a great many other things that need to come first as part of the suite of things we do to keep prices down. I don't think the work's been done on divestiture powers and whether they would indeed make a difference in our nation. But we have been getting on with the things we know will make a difference—that is, a mandatory Food and Grocery Code of Conduct. That follows extensive review by Craig Emerson. Dr Emerson held 65 bilateral meetings and four roundtables, looked at 68 submissions and ultimately made 11 recommendations, and the government accepts them all. The most important of those recommendations is that the Food and Grocery Code be made mandatory. But we are also looking at the scope of the code. Right now it covers: Woolworths, with an estimated revenue of $50 billion in 2024; Coles, with an estimated revenue of $38 billion; Aldi, $11 billion; and Metcash, $9 billion. Hopefully it will soon apply to Costco, with a revenue of $4.6 billion.

Australians spend a great deal of money on their day-to-day necessities at these stores. That is why the review recommended that our code place a greater emphasis on addressing the fear of retribution by including protection against retribution in the purpose of the code and requiring that any incentive schemes and payments that apply to supermarkets' buying teams and category managers are consistent with the purpose of the code. It also sees that we have an anonymous complaints mechanism established to enable suppliers and any other market—

Sorry, Deputy President: I seem to have a large amount of chatter going on to the left of me while speaking; it's a little bit distracting.