‘A fair go for families and farmers’: Chalmers in talks over triggering ACCC supermarket price inquiry

Treasurer Jim Chalmers is in talks with the consumer watchdog about launching a powerful inquiry into alleged price gouging by supermarkets, a move that could expose the difference between the prices paid to farmers and other suppliers, and the prices paid by shoppers.

Chalmers and Prime Minister Anthony Albanese have already called on supermarkets to pass any savings on to consumers, and this week commissioned former minister Craig Emerson to review the government’s voluntary Grocery Code of Conduct, which will run alongside a separate Senate inquiry into the big brands’ price-setting practices and market power.

Treasurer Jim Chalmers (pictured) and Prime Minister Anthony Albanese have already called on supermarkets to pass any savings on to consumers.Credit: Alex Ellinghausen

However, farmer groups and former competition chief Rod Sims have warned that both Emerson and the Senate lack the legal powers required to force supermarkets to reveal how much they pay suppliers, which is the crucial information in determining how much retail prices are marked up.

Chalmers has the power under section 95 of the Competition and Consumer Act to instruct the Australian Competition and Consumer Commission (ACCC) to initiate what is known as a price inquiry.

A spokesperson for Chalmers said he and ACCC head Gina Cass-Gottlieb were considering launching an inquiry that would grant the watchdog the power to compel supermarkets to reveal what they pay for produce.

“The treasurer is in ongoing discussions with the ACCC chair about what further monitoring or other actions might be necessary,” the spokesperson said.

There are calls for any inquiry to be given legal powers to force the big brands to disclose their price-setting practices. Credit: James Alcock/Getty

Coles issued a statement in response to price gouging allegations, highlighting its longstanding relationships with suppliers and arguing that the price of fresh fruit and vegetables varied due to seasonal weather conditions as well as supply and demand.

A Woolworths spokesperson said the company worked collaboratively with suppliers to match supply with demand, while ensuring they receive a fair market price.

Price gouging claims were first aired late last year when plummeting livestock markets were not reflected in the sticker prices seen in supermarket refrigerators.

‘We want a fair go for families and farmers. We want to make sure … when prices come off at the farm gate, they come off on the supermarket shelves as well.’

Treasurer Jim Chalmers

Cattle prices fell 66 per cent across the east coast in the 12 months to October, and lamb prices were down 38 per cent in the same timeframe.

Farmers questioned why their low returns did not deliver discounts for shoppers, with lamb cutlets selling in major supermarkets for about $43 a kilogram, and rump steak $28 a kilogram.

Chalmers this week flagged his concern that the grocery market may be stacked against farmers and consumers, and said he wanted to see a “fair go” for both groups.

“We want to make sure that the market works in the interests of people and producers, so that when prices come off at the farm gate, they come off on the supermarket shelves as well,” he said.

On the same day, the prime minister flagged a potential price inquiry and warned supermarkets that they have “a responsibility to look after their customers”.

Any measure necessary

Agriculture Minister Murray Watt said the government would use any measure it deemed necessary to ensure fair pricing.

“We are prepared to use every lever available to us to ensure that Australians shoppers get a good deal from supermarkets and also the Australian farmers get a good deal from supermarkets, and that is not happening,” Watt told the ABC on Friday.

The last ACCC price inquiry into supermarkets was initiated by the Rudd government in 2008. It found there was nothing fundamentally wrong with the grocery supply chain.

NSW Farmers Association president Xavier Martin said an inquiry with discovery powers was needed to address a “lack of clarity” around pricing.

“The ACCC can compel entities to turn up and to actually bring contracts with them and table them. [The ACCC] maintain confidentiality obviously around a whole lot of things, but they actually get the detail.

“NSW Farmers members don’t have that same level of confidence around this concept of Dr Emerson’s inquiry or with respect to [the] Senate inquiry.”

In an opinion piece published by this masthead on Friday, former ACCC commissioner Rod Sims argued that the government must find a mechanism to force supermarkets to deliver answers.

“How have the supplier and retail prices moved through time, why and how often? What considerations affect supermarket price setting? What targets are set for category managers? Why have supermarket profits increased recently?” Sims said.

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