Coles and Woolworths split should ‘never be taken off the table’, farmers demand

The $17.2bn horticulture sector has called for federal divestiture powers which could forcibly break up the supermarket chains. 

Farmers have demanded that a split up of supermarket giants Coles and Woolworths should not be ruled out, amid a fierce political debate over how Australia’s cost of living crunch should be addressed.

A Greens-led parliamentary probe is currently examining the price-setting and competition practices of Australia’s major supermarket chains, Coles and Woolworths, amid allegations of corporate profiteering and price gouging of both consumers and suppliers.

The companies, which maintain a 65 per cent market share, have vehemently denied the allegations, claiming their recent profits have been bolstered by in-store productivity improvements rather than opportunistically raising prices and squeezing suppliers.

Appearing before the Greens-led probe, the National Farmers Federation’s Jeremy Griffith said growers had been subject to “predatory” pricing practices.

Appearing before the inquiry, Jeremy Griffith of the National Farmers Federation (NFF) horticulture committee — the peak advocacy group for Australia’s $17.2bn fruit and vegetable industry — said divestiture powers, which would enable the government to forcibly break up the major supermarkets and help boost competition, should “never be taken off the table.”

“Breaking up duopolies isn’t as hard or as difficult as it might seem. In fact, the supermarket’s break themselves up on a very regular basis,” Mr Griffith said, citing the spin-off of Endeavour Group from Woolworths in 2021 and the split up of Coles from Wesfarmers in 2018.

“The moment you take it off the table, you are essentially giving a licence to print money to the existing duopoly,” he added.

Prime Minister Anthony Albanese has previously ruled out the proposal to break up the supermarket giants, arguing that the government should not possess powers to exert undue influence over the sector.

“We have a private sector economy in Australia, and not a command and control economy. We’re not the old Soviet Union,” the prime minister told ABC radio in February.

The Federation’s view is shared by Nationals leader David Littleproud who has proposed that the supermarket retailers should be forced to sell stores.

In further comments to the inquiry, Mr Griffith said the perishable nature of fruit and vegetables meant suppliers were at the behest of supermarkets.

“It allows them to offer rock bottom [prices] … knowing full well that the growers have almost no choice but to accept the price that’s on the table,” he said.

The major supermarkets have come under intense scrutiny amid allegations of corporate profiteering, and price gouging of both consumers and suppliers. Picture: NCA NewsWire / Roy VanDerVegt

Claiming that supermarkets have outsized influence in price negotiations and market manipulation, Mr Griffith added that margins had been squeezed across the industry as increased input costs had outrun farmgate prices.

“There are growers out there who advised us that they have not received price increases for 15 years … this is how bad it is,” he said.

“It’s a very, very tilted playing field.”

The committee also heard claims that primary producers were routinely forced to absorb discounts supermarkets offered through receiving lower wholesale prices, rather than a hit to the retailers own margins.

The NFF also recommended bolstering the powers of the competition watchdog, specific laws to deal with industries dominated by two major firms, and a stand-alone policy to protect growers from what he claimed were “predatory” buying behaviours.

The government is currently conducting a review of the voluntary Food and Grocery Code of Conduct which regulates the conduct of supermarket retailers and wholesalers towards suppliers.