In all the questions and comments following the announcement of my review of the Food and Grocery Code of Conduct between the major supermarkets and their suppliers, one was barely mentioned: If the review succeeds in getting a better deal for suppliers, won’t that necessarily force up prices for shoppers? The answer is no.
Sound counterintuitive? In principle, higher prices for suppliers and lower prices for consumers can be achieved through increased competition in grocery retailing.
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Craig Emerson is managing director of Emerson Economics. He is a distinguished fellow at the ANU, director of the Australian APEC Study Centre at RMIT and adjunct professor at Victoria University’s College of Business.
