Coles and Woolworths slammed again by ACCC in ‘concerning’ report on grocery sector
Coles and Woolworths charge 20% more for groceries than they did five years ago, require suppliers to pay rebates, and are alleging “land banking” to stifle competition.
These are the major findings from the ACCC’s interim report on the grocery sector, which comes at the tail end of a week that started with the competition regulator taking the two supermarkets to court, alleging unfair pricing practices.
The regulator found that Coles and Woolworths were protecting their control of the supermarket market by offering broadly the same pricing and products. “Supermarket retailing in Australia is an oligopoly”, the report claims, with Woolworths and Coles accounting for 67% of supermarket retail sales nationally, compared to Aldi’s 9% and Metcash-supplied independent supermarkets just 7%.
The ACCC noted such “oligopolistic market structures can limit incentives to compete vigorously on price”.
Mick Keogh, deputy chair of the ACCC, said: “We see Woolworths and Coles providing a broadly similar experience to customers through largely undifferentiated product ranges, pricing at similar levels and similar non-price offerings including loyalty programs.
Although groceries have risen by an average of 20% in the past five years, the ACCC wasn’t concerned by this, noting it seems in line with inflation seen in other products.
“We will examine whether supermarkets are exercising market power to increase retail prices more than is necessary to accommodate increases in the wholesale prices supermarkets pay,” Keogh said.
“We are also examining whether supermarkets are engaging in other business practices that may cause detriment to consumers or suppliers.”
One such business practice is so-called “land banking”, where supermarkets buy up large areas of land and leave them undeveloped, in order to block — or dissuade –competitors from establishing business in the area.
The report found Woolworths has 110 undeveloped sites, Coles has 42, while Aldi has just 13.
Another business practice under the ACCC’s microscope is the requirement of suppliers to pay the supermarkets rebates for promotions, which has forced some suppliers to operate at a loss.
“The issues raised by a number of suppliers are concerning,” Keogh continued.
“We are using our compulsory information gathering powers to examine this reported behaviour by the supermarkets, and will include any findings in our Final Report.”
Keogh also said “many consumers have told us that they are losing trust in the sale price claims by supermarkets”.
“These difficulties reportedly arise from some of the pricing practices of some supermarkets, such as frequent specials, short-term lowered prices, bulk-buy promotions, member-only prices and bundled prices.”
The report comes halfway into a year-long inquiry on the supermarket sector.
Prime Minister Anthony Albanese said the government is “taking a range of actions to make sure Australians are paying a fair price at the checkout, and Australian suppliers are getting a fair price for their goods”.
“Customers don’t deserve to be treated as fools by the supermarkets. They deserve better than that,” he said.
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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I remember Mr Richard Goyda promoting Coles would sell two litre of milk, for $1. As a consumer, I believed at the time the subsidy would come from the Coles Marketing fund. Yeah right.
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“Another business practice under the ACCC’s microscope is the requirement of suppliers to pay the supermarkets rebates for promotions, which has forced some suppliers to operate at a loss.” Good. I remember hearing the absolutely disgraceful price Woolies was offering an old agri mate for cartons of grapes. But of course, nowhere else to sell to. Disgusting and immoral. Get rid of these thieves.
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So, Coles prices have risen 20% in five years. Sounds a huge amount. Were you aware that ABS shows that in the past five years that average weekly earnings have risen by 15.6%? That equates to their average annual increase is less than 1% that of earnings. Oh … and COVID was in there partially a cause.
I ain’t a Coles fan, but c’mon .. be realists.
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Woolworths is absolutely expensive, I have been shopping at Woolworths practically all my married life and have seen the prices since covid have gone up so much, I’m a mother of 8 children and it’s very had to shop for groceries the way I used to. It it actually very stressful im sure for many Australians as well.
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I’ve noticed in Woolies 1 kg of ground coffee $37 next week $22 a large butter $7 small o r half size $6 as you can see for the coffee $15 difference who can afford that just leave it at $25 they make me so mad with the bullshit they try to scam customers with and the buy two get it cheaper only on chocolate as I can see and it’s still a rip off.
Thankyou Gavin Geale.
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