‘Real concerns’: Supermarket giants still in the watchdog’s crosshairs

The competition watchdog has vowed to keep the spotlight on the nation’s supermarket giants next financial year, saying it will escalate its investigations after a funding injection and a wave of consumer complaints about problems such as fake discounts.

Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gottlieb will on Thursday unveil the regulator’s priorities for 2025-26, and the cost-of-living crisis has ensured that groceries and essential services such as telecommunications and energy are high on its agenda.

ACCC chair Gina Cass-Gottlieb said was pushing for tougher powers to seek penalties against businesses that systemically failed to comply with consumer guarantees.Credit: Edwina Pickles

Cass-Gottlieb said the ACCC had received $30 million in extra government funding, which would enable the watchdog to expand from supermarkets to retail more broadly, and “escalate and increase” its investigations and enforcement in the sector.

It will focus on companies with market power: the watchdog says Coles, Woolworths, Aldi and IGA operator Metcash account for 83 per cent of national supermarket retail sales.

“It’s a critical part of our economy, it’s a critical part from consumers’ perspective, of purchasing the elements that sustain their households,” she said.

“And from many businesses’ perspective, small to medium to large, as suppliers to the supermarkets, they face unequal bargaining power and real concerns about unfair trading,” she said at a media briefing in Sydney on Wednesday.

The watchdog last year launched blockbuster legal action against Coles and Woolworths alleging the retail giants promoted discounts which were not genuine. Coles and Woolworths are fighting the case.

The ACCC also is set to deliver a separate inquiry into the supermarket sector to the government at the end of this month, after its interim report underlined the highly concentrated nature of the market.

Cass-Gottlieb did not provide details of any further planned investigations in the retail sector, but referred to complaints it had received from customers. She said consumers were concerned about what they viewed as “non-genuine” discounts, for example, and the accuracy of advertised delivery times. She also noted the ACCC was pushing for tougher powers to seek penalties against businesses that systemically failed to comply with consumer guarantees.

Outside the retail sector, Cass-Gottlieb said the ACCC would also seek to tackle excessive surcharging for debit and credit card payments – another gripe of consumers that has gained more publicity as cash usage has fallen.

While she said large companies had generally improved their disclosure of surcharges, compliance for smaller and medium businesses would be a key focus.

“Consumers currently are worried about the disclosure of additional surcharges on the coffee in the local café, and that’s important when people are concerned about cost of living,” she said.

It’s unlikely the ACCC would take a small business to court, but Cass-Gottlieb said the regulator would try to build awareness about surcharging rules – which say card surcharges can be no higher than the cost to the merchant of accepting a payment method.

Another big household expense to come under the ACCC microscope will be essential services such as energy and telecommunications, where Cass-Gottlieb pointed to the risk of companies misleading their customers, as well as complex pricing plans that can be difficult to understand.

The watchdog’s enforcement and compliance priorities also included areas as diverse as misleading claims by influencers who fail to disclose their sponsors; online “subscription traps”; and misleading environmental claims, known as “greenwashing.”

After the ACCC in December accused ASX-listed companies Ventia and Spotless of engaging in a price-fixing cartel for multibillion-dollar Department of Defence contracts, Cass-Gottlieb also flagged further action in relation to alleged cartel conduct.

“Everyone will understand [that] when competitors get together and brazenly agree not to compete on price or to reduce output or to buy in markets, it fundamentally damages the operation of competition,” she said.

“We have a number of cartel investigations strongly underway, and you will see in this year, those come to fruition.”

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