The ACCC welcomes today's announcement by the Australian Government that it will direct the ACCC to conduct an investigation into Australia's supermarket sector, including supermarket pricing practices and the relationship between wholesale prices, including producer prices, and retail prices.
The year-long investigation will also examine competition in the supermarket sector and how it has changed since the ACCC's last investigation in 2008.
"We know that food prices have become a major concern for the millions of Australians experiencing cost of living pressures," ACCC chair Gina Cass-Gottlieb said.
"When it comes to fresh produce, we understand that many farmers are concerned about the weak correlation between the price they receive for their produce and the price consumers pay at the checkout."
โWe will use the full range of our legal powers to carry out a detailed review of the supermarket sector and, where we identify problems or opportunities for improvement, we will carefully consider what recommendations we can make to the government,โ Ms Cass-Gottlieb said.
Following the 2008 ACCC investigation, Coles and Woolworths provided enforceable commitments to the ACCC to remove restrictive leasing provisions that may have prevented shopping centers from renting space to competing supermarkets. The ACCC investigation identified more than 700 potentially restrictive leases.
"Competitive markets encourage more attractive combinations of price and quality for consumers, as well as a greater variety of choice," said ACCC deputy chairman Mick Keogh.
"Our research will examine the nature of the current competitive environment among supermarkets, as well as the barriers to greater competition and new entries into the sector."
โWe believe we are well positioned to undertake this wide-ranging investigation and will draw on our experience in competition, consumer law, agriculture and the supermarket sector in particular,โ Mr Keogh said.
The investigation will also look at any emerging issues related to more recent trends, including online shopping, changes in technology and loyalty programs.
The ACCC expects to publish an issues paper in February in which it will solicit views on the key issues it will consider in this investigation. An interim report will be delivered to the Australian Government later this year and the final report will be delivered early next year.
The ACCC will publish the Australian Government's formal direction, including terms of reference, when it receives it.
Background
Under Part VIIA of the Competition and Consumer Act, the Treasurer may direct the ACCC to conduct a pricing investigation into a particular matter.
Such an investigation allows the ACCC to use its mandatory information gathering powers to collect information from relevant parties subject to the investigation.
The ACCC's investigation into the supermarket sector is separate from the Government's recently announced review of the Food and Grocery Code of Conduct, which relates to the conduct of retailers and wholesalers towards suppliers.
The ACCC currently plays a role in promoting compliance with the voluntary Food and Grocery Code and will actively contribute to this review of the Code.
The ACCC recently indicated it has been closely considering consumer reports alleging false or misleading information. "It was now" or other prices โspecialโ advertised by supermarkets, and whether they may raise concerns under the Australian Consumer Law. ACCC assessments are ongoing and are entirely independent of this new investigation into the supermarket sector.
For updates, visit the Supermarket sector consultation 2024-25.
