“Long standing and mutually beneficial relationships with our supplier partners, both small and large, are also critical to enable us to better serve our customers,” she said.
Supermarket investors appeared pleased: Coles’ share price was up 4.6 per cent and Woolworths had risen 5.6 per cent.
Former ACCC chairman Graeme Samuel.Credit: Alex Ellinghausen
Former ACCC chairman Graeme Samuel, who led the regulator between 2003 and 2011, criticised the report’s recommendations as not effective or not having enough teeth. Six of the 20 recommendations relate to providing additional pricing details to consumers, which Samuel said was “information overload”.
“[The ACCC] almost treat consumers as mugs,” Samuel told this masthead. “They really say to consumers, you’re not savvy enough to know what’s going on in the supermarkets, to do your shopping in the right way, and therefore we’re going to give you all this information … which I don’t think is actually going to achieve much at all.”
The report did not make any findings around price gouging or land banking, which the regulator said was a “complex assessment” that had to be done on a case-by-case basis that it did not have enough time for.
“Price gouging is not mentioned anywhere. And for good reason; it never existed,” Samuel said, adding that the failure to make findings around land banking was “very disappointing”.
The report said “substantial information asymmetry” exists between Coles and Woolworths and their suppliers, which has led to “monopsony power”, which means the supermarkets purchase such a high percentage of a product that they can impact its overall market price, sending prices down by buying less or increasing it by buying more.
If the two majors maintain and grow their market share and market power, their margins will likely continue to grow, it said.
The ACCC described Aldi as a “hard discounter” that “does not face direct competition” or compete head-to-head with Coles and Woolworths, due to its smaller range. Aldi’s prices were found to have increased the most of all four major grocery operators during the 2023 and 2024 financial years.
The ACCC has recommended all supermarkets publish online and in-store and to disclose any decrease in package size, also known as shrinkflation.
Aldi is a “hard discounter” but doesn’t face any direct competition, the ACCC found.Credit: Oscar Colman
A spokesperson for Aldi said more customers have turned to the German-headquartered supermarket that doesn’t engage in high-low pricing and keeps prices low through “extraordinary efficiency”.
“From our curated range of 1800 quality products, simplified packaging, our line-up of exclusive brands and our Australian first sourcing policy, to how we stack the shelves and load our trucks – delivering value to our customers is built into our business model,” the spokesperson said.
Aldi, which has said it will not offer online shopping to keep costs low and currently does not offer an online catalogue, is working on a new website to go live in April that will include prices for its core range and its popular limited edition Special Buys.
IGA operator Metcash said it was pleased the ACCC had recognised that independent supermarkets were important to competition, particularly in rural and remote regions, and its view that there are barriers for independents when competing with the major chains.
“We too are concerned with the growing dominance of the major supermarket chains in Australia and their ability to continue to grow through creeping acquisitions of independents and land banking,” said a Metcash spokesperson.
Nationals leader David Littleproud accused the government of never believing in real change, saying supermarkets could continue to price gouge families while ditching suppliers with impunity.
The Coalition is promising supermarket-specific divestiture powers, a standalone commissioner for the sector and powers for the ACCC to conduct random supermarket audits.
“The inquiry asks for more transparency and reporting but fails to understand if there’s not a consequence for doing the wrong thing, then it’s just business-as-usual for the big supermarkets,” he said.
Competition Minister Andrew Leigh said the report proved that supermarkets had been “stacking the shelves in their favour”, arguing the government had strengthened laws around the sector at the supplier and customer end of the business.
“We’re looking not only to get a fairer deal for families at the checkout, but also a fairer deal for farmers,” he said.
The ACCC noted one of the issues is the lack of competition offered by Aldi in some parts of the country where it lacks any outlets.
Tasmanian independent senator Tammy Tyrrell said Aldi should move to her state.
“Tasmanians deserve better grocery competition and cheaper grocery prices. It’s time we get what every other state has and ALDI comes across the Bass Strait,” she said.
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