’Treated as fools’: ACCC interim inquiry report finds groceries hiked by 20 per cent since 2019

The Prime Minister says “customers don’t deserve to be treated as fools” after the findings of the largest supermarket inquiry in 15 years.

The price of a typical basket of groceries has increased by more than 20 per cent in the past five years, with low-income households spending more than a fifth of their income on food, a highly anticipated report into supermarkets has found.

The consumer watchdog released an interim report on its supermarket inquiry late on Thursday night.

The report finds while prices across all grocery product types have increased, the most considerable hikes are in dairy products (32 per cent) and bread and cereal items (28 per cent).

Meat and seafood have increased by a fifth, while the price of fruit and vegetables has increased by 19 per cent between the March 2019 quarter to the June 2024 quarter.

The cost of fruit and vegetables has increased by 19 per cent in five years, the ACCC’s interim supermarkets report has found. Picture: NewsWire / David Geraghty.

The findings were released in the Australian Competition and Consumer Commission’s interim report into the supermarket sector that examined whether supermarket giants were dudding suppliers and ripping off customers due to a lack of competition.

“Customers don’t deserve to be treated as fools by the supermarkets. They deserve better than that,” Prime Minister Anthony Albanese said in a statement on Friday.

“This is an important piece of work and we will study it closely.

“My government is taking a range of actions to make sure Australians are paying a fair price at the checkout and Australian suppliers are getting a fair price for their goods.”

Assistant Minister for Competition Andrew Leigh said the inquiry was the most thorough look into the supermarkets for more than 15 years.

“Businesses need to do the right thing by Australians,” he said.

“Greater competition is critical for lifting dynamism, productivity and wages growth, putting downward pressure on prices and delivering more choice for Australians dealing with cost-of-living pressures.”

Anthony Albanese says customers deserve a fair go. Picture: NewsWire / Martin Ollman

Mr Leigh is expected to speak to the media later on Friday morning.

The report found many consumers were facing “excessive” prices, with many shoppers buying less food and focusing on cheaper products in order to stay within their budgets.

Shoppers were also eating less frequent and smaller meals and changing their habit by “increasingly” comparing online prices before going in store however faced “real difficulties” with comparing prices.

As a result, ACCC deputy chair Mick Keogh said Australians were “losing trust in the sale price claims by supermarkets”.

“These difficulties reportedly arise from some of the pricing practices of some supermarkets,

such as frequent specials, short-term lowered prices, bulk-buy promotions, member-only

prices and bundled prices,” he said.

In Australia, Woolworths and Coles contribute to 67 per cent of supermarket sales, with Aldi accounting for 9 per cent and independently franchised IGA, owned by Metcash, contributing 7 per cent.

The ACCC has released a report on supermarket pricing that reveals many are struggling to buy food within their budgets. Picture: NewsWire / Gaye Gerard

While the ACCC did not release any recommendations, and will only do so in its final report due in February 2025, it said the report would question whether dominant grocers had abused their market power to inflate prices.

The ACCC will also provide detailed analysis on 14 everyday products, including beef, chicken, pork, bananas, apples, strawberries, cucumbers, potatoes, eggs, milk, cereal, biscuits, pet food and dishwashing tablets.

“We will examine whether supermarkets are exercising market power to increase retail

prices more than is necessary to accommodate increases in the wholesale prices

supermarkets pay,” Mr Keogh said.

“We are also examining whether supermarkets are engaging in other business practices that

may cause detriment to consumers or suppliers.”

On Monday, Mr Albanese released the draft exposure mandatory Food and Grocery Code of Conduct for companies that record more than $5bn in revenue. It includes penalties of up to $10m.

It also followed the ACCC launching legal action against Coles and Woolworths over allegations of misleading consumers by inflating prices before discounting and advertising products as falsely reduced.

Originally published as ’Treated as fools’: ACCC interim inquiry report finds groceries hiked by 20 per cent since 2019