Will the ACCC’s spotlight on supermarkets deliver any relief?

There is plenty at stake for the nation’s supermarkets in the competition regulator’s inquiry into the sector. But it’s politicians of every stripe who will be sweating on the prospect of the Australian Competition and Consumer Commission digging up solid dirt on the grocery giants.

To describe the first two days of the inquiry’s grilling of Woolworths executives as dry would be the ultimate understatement. The competition watchdog’s forensic approach has so far failed to land a punch or leave red-faced supermarket executives squirming in their seats.

Woolworths boss Amanda Bardwell speaks at the ACCC hearing.

Instead, Woolies executives including former CEO Brad Banducci have been subjected to a detailed examination of the various elements that make up the cogs of a supermarket business - from supply chain and loyalty programs to self-checkouts.

There are no gotcha moments, and the ACCC affair seems as far removed as it can be from the numerous Senate inquiries, in which politicians have been striving to catch out corporate executives with pointed questions.

Senate inquiries are more often than not about the theatre, point-scoring and creating headlines by politicians, distinguished by their distinct lack of expertise on the subject.

The ACCC has the luxury to be methodical, given it already hit its peak headline moment last month when it sued Coles and Woolworths, accusing them of offering supposedly discounted prices on goods which were marked higher than their original shelf price – a claim both retailers deny.

While very few of those watching will have a much greater appreciation of the mechanics of supplier rebates – how Woolworths buys and holds potential supermarket property sites, or how much data it collects via its loyalty schemes or app – they will be interested in the outcome.

At the end of the ACCC’s investigation (of which the public inquiry forms only part), there will be a report, which will land in February – just months before the federal election.

This report will be a crucial tool for political parties, all desperate to prosecute a public relations case against the big supermarket chains – Woolworths and Coles – that have been profiteering at the expense of cash-strapped consumers.

Canberra really needs the supermarket report card from the ACCC to demonstrate that the two giants of the sector are behaving in an anticompetitive manner.

Labor, the Coalition and the Greens need their “I told you so moment”. And that prospect becomes more of a reality if the ACCC’s investigation uncovers some real stinkers.

Evidence of price-gouging won’t cut it because it’s not illegal, so even if the ACCC manages to establish prices are higher than they need to be, it would be legally irrelevant.

But the supermarket operators will be worried about land-banking (buying and holding sites for years). It’s their most vulnerable issue and likely to be construed as anticompetitive behaviour because it may prohibit smaller supermarkets from setting up shop.

But Woolworths CEO Amanda Bardwell and Coles CEO Leah Weckert know there’s no winning against the tide of discontent that has the supermarkets scrambling. If the ACCC finds any behavioural shortcomings, it will only serve to cement the public’s view that the supermarkets are greedy, with their moral compass pointed towards shareholders, not customers.

And those findings will be amplified by the political classes who are looking to curry favour with their constituency in the lead-up to the election.

If the ACCC finds no evidence of any meaningful behavioural or competition issues, the public will continue to blame supermarkets for the cost-of-living pressures, and Canberra will become invisible on the issue.

For supermarkets, it’s a lose-lose scenario. Meanwhile, consumers will be hoping the politicians can dial down the rhetoric and focus on real solutions.

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