Trolley in a supermarket aisle
Raw deal claims by shoppers and farmers will be probed by the consumer and competition watchdog. Image by Luis Ascui/AAP PHOTOS
  • economy, business and finance

‘Unfair’ supermarket prices on watchdog’s hit list

Jack Gramenz March 7, 2024

Producers and shoppers are concerned about supermarket prices, which will form one of the consumer watchdog’s top priorities for the coming year.

Competition in the under-fire supermarket sector, as well as fair trading, consumer protection and pricing will all be priorities for the Australian Competition and Consumer Commission, chair Gina Cass-Gottlieb says.

“This new priority reflects significant price increases in food and groceries and the concerns of many Australian consumers and farmers about supermarket pricing,” she told a Committee for Economic Development of Australia event on Thursday.

The watchdog was very cognisant of those pricing concerns, Ms Cass-Gottlieb said on Wednesday during a media briefing on the commission’s 2024/25 priorities. 

ACCC Chair  Gina Cass-Gottlieb
 Gina Cass-Gottlieb says the ACCC will look at key products from the farm to the supermarket shelf. Image by Lukas Coch/AAP PHOTOS 

The government in January directed the commission to conduct a 12-month inquiry in the sector.

Claims by farmers of a raw deal from supermarkets will also be examined.

“Farmers are manifestly saying that they think they’re getting an unfair share of the profits that are made through the supply chain,” Ms Cass-Gottlieb said.

“We will look at key products from the farm gate to the supermarket shelf and look at where the margins are being made.”

The commission will be particularly interested in any evidence of better price competition in areas with more small and independent supermarkets.

The way prices are set will also be interrogated.

Promotional discounts, potentially optimised by data collected through loyalty programs, could be misleading consumers about value by claiming that cuts had been made to previously inflated prices.

They could be encouraging some consumers to stock up while prices were low, while those who could not afford to buy in bulk copped the increased price, Ms Cass-Gottlieb said.

“As compared to lower everyday prices as a result of competition, disadvantaged members of our community … are not able to access the benefit of those prices in the same way,” she said.

Supermarkets are not the only area in which consumers have recently felt they are overpaying.

“We also have a focus, which is new, on the aviation sector … we’re conscious that there continues to be unreliability in performance, concerns about pricing,” Ms Cass-Gottlieb said.

Flight lists are seen at Brisbane Domestic Airport
 The consumer watchdog wants to take a closer look at the aviation sector. Image by Russell Freeman/AAP PHOTOS 

The competition watchdog is concerned about the extent to which airline profits are being reinvested in capacity and crew to provide reliable services.

“We’re most focused on where is the money going and how does that lead into the consumer proposition,” Ms Cass-Gottlieb said.

Other priorities include “greenwashing” claims about sustainability, competition in essential services such as energy and telecommunications and improved compliance with consumer law from National Disability Insurance Scheme providers.

Priorities are shaped by cost-of-living pressures, the net-zero emissions transition and poor conduct in the digital economy, Ms Cass-Gottlieb said.

A mandatory and enforceable code requiring swifter action to protect consumers against scams is also on the table, but it will need to provide “end-to-end” coverage so that digital platforms, banks and telecommunications companies can’t blame each other.

The penalties will also have to be harsh enough to stem systemic, repeated conduct.

“Our experience with codes is when the penalties are too low, they do not provide the right incentives,” she said.

Mobile software giants taking a cut of purchases in their app stores and the amounts credit providers charge merchants to process payments are also under the microscope.

Investigations will additionally target comparison websites suspected of not providing independent and unbiased comparisons, favourably recommending products in which they may have a financial interest or relationship.

Online influencers can expect similar scrutiny for their disclosure of sponsorships or commercial payments, Ms Cass-Gottlieb said.