Supermarkets will be targeted in a price probe by the competition watchdog, the prime minister, Anthony Albanese, announced on Thursday.
In a speech to the National Press Club that sets out Labor’s new income tax plan, Albanese revealed two new measures to tackle rising grocery prices.
The Australian Competition and Consumer Commission will conduct a 12-month price inquiry and $1.1m for consumer group Choice to help shoppers better understand if they are being ripped off by supermarkets.
Grocery prices have come under renewed scrutiny since increased margins helped Coles post a $1.1bn full-year profit at its most recent full-year results, while Woolworths lifted its annual profit to $1.6bn.
Albanese said the treasurer, Jim Chalmers, “will be directing the ACCC to conduct a 12-month price inquiry into the supermarket industry”.
“The ACCC has significant powers and it is the best and most effective body to investigate supermarket prices,” he said.
“To look at how things like online shopping, loyalty programs and changes in technology are impacting competition in the industry.
“And to examine the difference between the price paid at the farm gate and the prices people pay at the checkout.
“For me, it’s this simple. When farmers are selling their product for less, supermarkets should charge Australians less.”
The Woolworths Group chief executive, Brad Banducci, said his company would “welcome the opportunity to assist the ACCC with its inquiry.”
“We know many Australian families are doing it tough and looking for relief at the checkout,” he said in a statement.
“Food inflation has continued to moderate in recent months and we expect this to continue throughout 2024.”
Earlier in January, Labor appointed Craig Emerson to lead a review of the grocery code of conduct and Albanese highlighted a “discrepancy” between flat or reduced prices paid by Coles and Woolworths to farmers, and high consumer prices.
Without a fresh inquiry the ACCC would have limited powers to consider claims of price-gouging, with its remit generally confined to claims of misleading or deceptive conduct, such as its scrutiny of “was, now” pricing discounts.
Albanese also announced that Choice will be funded “to provide shoppers with a clear understanding of how supermarkets are performing on this score”.
“Because across thousands of products it can be hard for people to find the best deal. We are backing Choice – renowned for their commitment to consumer fairness – to provide clear and regular information on prices across a basket of goods.
“This will promote transparency, enhance competition and drive value.
“These actions send a very clear message – our government is prepared to take action to make sure that Australians are not paying one dollar more than they should for the things they need.”
The Nationals leader, David Littleproud, welcomed the inquiry but said Labor had been shamed into action.
“Labor could have started the ACCC investigation before Christmas but didn’t understand the scale nor severity of their cost-of-living crisis,” he said.
Earlier on Thursday the opposition leader, Peter Dutton, continued to target Woolworths over its decision to stop selling Australia Day merchandise due to lack of demand.
Dutton told 2GB Radio that Woolworths had “one responsibility … to deliver value to [its] shareholders and to [its] customers” rather than engage with social causes.
“Their role is not to tell Australians what to think or how they should think, or withdraw product lines because they don’t want Australians to celebrate Australia Day,” he said.
Dutton claimed that Labor’s energy policy – coal and gas price caps that have reduced wholesale prices and consumer rebates worth hundreds of dollars – were “driving up every input cost” in the economy.
“Which is why you’re paying more when you go to Coles or Woolies for those grocery items,” he claimed.
Albanese said that Labor has delivered “a range of targeted measures – from energy bill relief to increased rent assistance – that provide meaningful help with the cost of living, without adding to inflation”.
Albanese also flagged that the “broader and better tax cuts are not the beginning of our actions on cost of living – and they will not be the end”, indicating further help in or before the May budget.
