The Coalition and the Greens are pushing for Labor to consider implementing powers to break up supermarket giants like Coles and Woolworths, despite the competition watchdog rejecting the idea in its sector review.
Shadow treasurer Angus Taylor is calling on the government to debate and pass reforms to supermarket competition laws when Parliament reconvenes before the budget for the upcoming election.
Despite this, the government remains opposed to such tough legislation, with Treasurer Jim Chalmers believing the risks outweigh the benefits.
The political feud over supermarket monopolies reignited after the Australian Competition and Consumer Commission (ACCC) released its comprehensive report on the sector.
The report, spanning 441 pages, singled out Coles, Woolworths, and Aldi as some of the world’s most profitable grocery stores, with their margins increasing during a period when consumers were facing a living cost crisis.
The ACCC, while stopping short of recommending divestiture powers, suggested 20 measures, including mandatory publication of all prices online and allowing comparison tools access to this data.
The ACCC did not propose laws that would require Coles or Woolworths to divest stores as punishment for price gouging.
Undeterred, both the Coalition and the Greens are rallying for intervention, with Taylor emphasizing the lack of serious competition regulation for supermarkets.
The Greens’ economic justice spokesperson, Nick McKim, argued that the ACCC’s findings support the need for divestiture powers.
“Without laws to force more competition and make price gouging illegal, the supermarket duopoly will keep driving up grocery prices while raking in billions of dollars in profits,” he stated.
Chalmers, however, dismissed divestiture as ineffective, arguing it could lead to simply transferring stores between large players.
Labor has agreed in principle to the report’s 20 recommendations.
The government is taking “very significant steps” to address supermarkets, including a new food and grocery code and additional funding for the ACCC to monitor misleading pricing practices, said Treasurer Chalmers and the Assistant Minister for Competition, Andrew Leigh.
Woolworths acknowledged the report in a statement to shareholders, committing to carefully review its findings and recommendations.
The company has already acted on some ACCC suggestions, such as simplifying promotional programs and making special offers clearer through improved signage.
Woolworths’s CEO, Amanda Bardwell, welcomed recommendations aiming at customer transparency without increasing costs or having unintended effects.
“Our experience, both in-store and online, shows that the Australian grocery market is highly competitive,” she said.
Coles, in its response to the ACCC report, also stressed the competitiveness of the Australian supermarket sector.
“Coles supports any recommendations that improve transparency for suppliers and customers but is cautious of measures that increase bureaucracy and costs,” the supermarket stated.
Ashley de Silva, the CEO of The Choice, noted that “The ACCC’s report confirms this is a highly concentrated market, with major supermarkets appearing among the most profitable globally during a living cost crisis.”
