Albanese backs tougher powers for ACCC to tackle supermarket prices

Prime Minister Anthony Albanese has cleared the way for tougher measures to curb the market power of the country’s biggest supermarkets in a bid to lower prices and convince voters he is acting on the cost of living.

Albanese said he was willing to give the Australian Competition and Consumer Commission (ACCC) greater powers if it asked for more government action to drive down prices, weeks after it warned that merger laws were not strong enough to stop harmful takeovers.

In his strongest warning to the retail giants after days of political argument over consumer prices, Albanese also sent a clear signal he was willing to impose a mandatory code on Woolworths, Coles and other supermarkets to lower grocery prices.

The comments prepare the ground for a Labor agenda this year which responds to voter concerns by embarking on a “war on inflation” and unveiling new measures in the May budget to help with household costs.

With the government facing a byelection in the Melbourne electorate of Dunkley within weeks, Albanese is preparing to make a major speech to the National Press Club in Canberra next week to set out his agenda.

Opposition Leader Peter Dutton has accused the government of “driving up the prices of everything” with its plans to encourage renewable energy and has also called for a boycott of Woolworths because it chose not to stock Australia Day merchandise.

Albanese responded on Tuesday by contrasting his action on competition and prices with Dutton’s rhetoric about the national day.

“My government is concerned about the price of what consumers pay at Coles and Woolies and other supermarkets,” he said. “Our opponents seem to be obsessed by calling for boycotts of Woolworths, Kmart, I assume and Aldi as well.

“Woolworths alone employ more than 200,000 Australians. I’m not quite sure how Mr Dutton explains to the 200,000 employees of Woolworths [that] he thinks they shouldn’t have a job,” Albanese said.

“My government is concerned with the fight against inflation. Peter Dutton is concerned about fighting culture wars.”

Last week Dutton accused Woolworths of an “outrage” after News Corp newspapers reported it was not selling flags and other Australia Day merchandise, leading the opposition leader to call for a boycott.

“If they don’t want to celebrate Australia Day, well that’s a decision for them, but I think people should boycott Woolworths,” he said.

The Opposition Leader has not repeated the call in more recent interviews, however, after the Business Council of Australia and other groups backed Woolworths and Labor attacked the Coalition for encouraging a boycott that would cost jobs.

Former ACCC chair Rod Sims said last week that the government needed to go “way beyond” its latest announcements if it wanted to give consumers real choice, because the market needed fundamental reform.

The opposition leader accused Woolworths of an “outrage” over a decision not to sell flags and other Australia Day merchandise.Credit: iStock

Albanese and Treasurer Jim Chalmers last week named former Labor cabinet minister Craig Emerson to review the Food and Grocery Code of Conduct, a voluntary scheme set up by supermarkets to promise fair treatment for grocery suppliers.

Chalmers is also in talks with ACCC chair Gina Cass-Gottlieb about whether to give the regulator formal power to launch a price inquiry into the supermarkets.

Cass-Gottlieb told The Australian Financial Review this week she was “carefully looking” at whether to take legal action against one big supermarket chain over alleged deceptive conduct with discounts promised to consumers.

A broader, concern, however, is the strength of the Competition and Consumer Act in stopping mergers that are likely to substantially lessen competition, a key issue in retail because Coles and Woolworths have used takeovers to expand or protect their market share. The two big chains have 70 per cent of the market, while the third-largest chain, Aldi, has 10 per cent.

“The ACCC does not have the tools it needs to see and prevent all anti-competitive mergers, and it means that harmful mergers may be taking place under the radar,” Cass-Gottlieb said in a submission to the government last month.

Chalmers and Assistant Treasurer Andrew Leigh are considering changes to competition law under a review they launched last year.

Albanese sent a clear message on Tuesday that he would agree to stronger powers for the ACCC if it sought the changes. “If the ACCC asks for more power my government’s up for giving it to them,” he said.

“We have the review by Dr Emerson, looking at whether the existing voluntary code of conduct is good enough, and whether there’s a need for some mandating there. We are very concerned about the cost of living.”

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