Prime Minister Anthony Albanese says Coles, Woolworths record profits during cost-of-living crisis is ‘out of sync’

Prime Minister Anthony Albanese says Coles and Woolworths making record profits during a cost-of-living crisis is a concern and ‘will act’ if consumer prices don’t fall.

Anthony Albanese says the government “will act” if supermarket giants don’t drop their prices in accordance with what they are paying farmers.

Prime Minister Anthony Albanese has slammed “out of sync” supermarkets and warned the government “will act” if costs increase at the checkout.

Supermarkets could be forced to reveal to farmers the prices they are paying other suppliers for ­produce as part of the government’s bid to bring down food prices and help ease cost-of-living concerns.

More transparency is among the measures being considered by former trade minister Craig Emerson as he conducts a review of the food and grocery code of conduct, which was introduced in 2015 to improve standards of business conduct in the sector.

He will also consider making the voluntary code mandatory to hold all retailers and wholesalers to account in their dealings with suppliers as part of Mr Albanese’s push for supermarkets to relay cheaper grocery and meat prices to consumers.

The PM was asked about Coles slashing their prices for beef and lamb by more than 20 per cent following accusations supermarket giants have not passed on lower prices to farmers.

“We want to make sure that every single reduction in cost to the big supermarkets gets passed on to the customers. They have a responsibility to do so and we will act,” he said.

“We know that at a time when people are doing it tough, the big supermarket chains have been making record profits and we know that there’s something out of sync there.”

“We have had the review by Dr Emerson announced. We’re also having action being undertaken by the ACCC. In addition to that there’s a senate inquiry.

“We say to all of the supermarkets and to big business, they have a responsibility to look after customers and my government is prepared to take whatever action is necessary.

“We know at the moment, the Code of Conduct is a voluntary one, it’s industry led. But we’re prepared to look at mandating, if that is necessary. So it’s a good thing that we’re seeing the pressure that the government is placing on supermarkets, reducing costs at the supermarket.”

Mr Albanese also addressed fee-free TAFE and said the scheme would put “downward pressure” on the cost-of-living crisis by “making something free.”

Coles have slashed their prices for beef and lamb by more than 20 per cent following accusations supermarket giants have not passed on lower prices to consumers.

Dr Emerson’s appointment to lead the statutory review came as the latest consumer price index data from the Australian Bureau of Statistics (ABS) showed food price inflation had continued to slow in November.

The economist, who was a member of parliament from 1998 to 2013 and worked as competition, trade and small business minister, told The Australian that requiring wholesalers and retailers to be transparent about the prices paid to farmers would help food producers and consumers.

“It’s a good idea and it’s a matter of generating and providing that information,” Dr Emerson said. “Sometimes information can be powerful for consumers and also for the suppliers.”

On the flipside, the information provided could show that supermarkets were not price gouging and the discrepancy between farmgate values and retail prices was due to costs of distribution, labour, marketing and electricity, he said.

The review will also consider the impact of the code and whether its provisions should be extended and whether it should include civil penalty powers.

Dr Emerson, who is due to report back to the government by July, said increasing competition was important and that the emergence of Aldi as a major supermarket in Australia had had a positive effect for consumers.

“If there are ways to facilitate greater competition in supermarket delivery then obviously I’d be interested in that,” he said.

While the terms of the review are limited to the relationship between retailers, wholesalers and suppliers, Dr Emerson said consumers would ultimately benefit if the policy settings were right.

The PM says supermarket giants making record profits during the cost of living crisis is “out of sync”.

Nationals leader David Littleproud welcomed the review, but said the government also needed to separately appoint the Aus­tralian Competition and Consumer Commission to specifically probe the food pricing policies of supermarkets.

“(The code review) will not have the power to compel people to come forward and give evidence,” he said.

“If you see a zucchini farmer getting $2.70 a kilogram and the supermarkets charging $7.60 they’re using falling prices to increase their profit margins without passing it on to consumers.”

National Farmers Federation president David Jochinke said the review needed to look at the entire supply chain.

“As the cost of farming and the cost of living go through the roof, now is the time to correct this power imbalance and improve market price transparency so it’s not being used against farmers,” Mr Jochinke said.

ABS figures released on Wednesday showed food prices rose 4.6 per cent in the year to November, down from the 5.3 per cent annual increase in October.

Inflation for red meat and fresh produce was less than 1 per cent, which RaboResearch senior food retail analyst Michael Harvey said would be “welcome news for Australian consumer”.

Assistant Minister for Competition Andrew Leigh said the review would form an important part of the wider work of the government’s competition taskforce.

“Capitalism depends on competition,” Mr Leigh said.

“Monopolies gouge consumers and workers, and undermine fairness. Competition means better prices and more choice for Australian families.”

The review will run alongside a separate senate inquiry into supermarket food pricing, led by the Greens, that will focus on market concentration and the effect on food prices as well as the rising profits of supermarket giants.