ACCC’s 20 recommendations to keep supermarkets honest in landmark report

The Albanese government has come under fire after the ACCC listed 20 demands in a landmark report that aims to keep supermarkets honest.

Nationals Senator Bridget McKenzie has criticised Labor Treasurer Jim Chalmers for his “flaccid response” and lack of penalties after an inquiry by the consumer watchdog into the Australian grocery sector

“This is a very flaccid response from Jim Chalmers. We put a very comprehensive plan on the table to address the lack of competition in our supermarket sector and the government failed to pick up on it,” Ms McKenzie told Sky News.

“They can’t build a house yet somehow they’re going to stop Coles and Woollies from gaming the planning system, but I didn’t hear the word penalties. I didn’t hear any tough measures that are actually going to put a very strong incentive for our supermarkets to behave better.

“Every time this government tries to take action and look strong – they’re backing big unions, big business, big government – they’ve failed.”

Ms McKenzie claimed that despite the Australian Competition and Consumer Commission inquiry, ongoing price increases suggest that the supermarkets are colluding together.

“The Labor Party is always on the side of big business and never on the side of the Australian consumer and that is why they haven’t got a big stick in this response.”

The Coalition proposed a response that included fines of up to $2 million or divestiture, which Ms McKenzie argued would have served as a “serious disincentive”.

“This is, once again, the Labor Party backing their mates at the big ends of town,” she added.

The ACCC wants to name and shame perpetrators that shrink the size of products to disguise soaring costs.

However Mr Chalmers said the inquiry was part of a number of steps taken by the Albanese government to bring more “scrutiny” on the sector.

The Treasurer said although the report did not conclude that price gouging had been taking place, the ACCC had highlighted the market dominance of the two major supermarkets.

“That’s not the conclusion of the ACCC, but the ACCC does say that there’s a lot of market dominance, and what we need here, and what we’re delivering here as a government is more scrutiny, more information and more competition,” Dr Chalmers told ABC News Breakfast.

“So the report’s really welcomed because what it shows is that there are things that we can do, and there are things that we are doing to crack down on the supermarkets.”

The ACCC demanded supermarkets should be forced to alert shoppers when brands shrink the size of products like chips, biscuits and laundry powder to disguise soaring costs.

Naming and shaming perpetrators of so-called “shrinkflation” to ensure customers aren’t unknowingly ripped off is one of 20 recommendations in a landmark report in the country’s increasingly expensive and unfair grocery sector by the ACCC released on Friday.

At a bare minimum the ACCC said notifications about package size changes that are “adverse to consumers” should be published “in proximity” to the product ticket on the shelves to ensure transparency.

Treasurer Jim Chalmers says Labor will continue its supermarket crackdown. Picture: NewsWire/Tertius Pickard

Supermarkets should also be required to use “uniform” unit pricing that would clearly help a shopper compare costs.

The ACCC highlighted an example in a submission from consumer group CHOICE, which had found instances where Coles interchangeably used a price per 100 grams and a price per item measurement for a pack of tea bags, leading to frustration and confusion for shoppers.

The watchdog also took issue with the murky benefits of loyalty programs like Coles’ Flybuys and Woolworths’ Everyday Rewards.

The report said while the programs gave the supermarket giants “a wealth of consumer and transaction data,” on average shoppers needed to spend $2000 to receive a $10 discount, which equalled to half a cent for every dollar spent.

In order to make the programs more beneficial, the ACCC said members should receive disclosure summaries on the amount spent by customers and the points and benefits earned and redeemed over a specific period.

ACCC deputy chair Mick Keogh said the easy to read measures would help shoppers make more informed decisions.

“By giving consumers this transparency over what are effectively price increases, consumers

would be better able to ‘vote with their feet’ and switch to cheaper alternatives if that is their

preference,” he said.

Supermarkets should be required to use “uniform” unit pricing, the ACCC concluded. Picture: AAP

The ACCC did not make any recommendations around the so-called “big stick” approach where supermarkets could be forced to sell off parts of their business if found to be anti-competitive.

The Coalition has pledged to pursue forced divestiture powers in order to keep supermarkets and hardware chains in check, but Labor has criticised the move as a risk to jobs with no benefit for consumers.

The Albanese Government has agreed to all of the ACCC’s recommendations in principle, with Treasurer Jim Chalmers on saying Labor would continue its “supermarket crackdown” to ensure “more competition, better prices and better deals for Australians”.

“We are taking action to get a fair go for families at the checkout and a fair go for farmers at the gate,” Mr Chalmers said.

“This is about ensuring Australians aren’t treated like mugs by the supermarkets.”

Labor previously gave $30 million to the ACCC to go after supermarkets using misleading pricing tactics, and next Tuesday’s budget will include $2.9m to develop targeted education programs so suppliers can understand and ensure their rights are met under the Food and Grocery Code.

Agriculture, Fisheries and Forestry Minister Julie Collins said this would “help level the playing field for Australia’s farmers and producers”.

“Our farmers produce exceptional, high quality food and deserve a fair go when working with the supermarkets,” she said.

Originally published as ACCC’s 20 recommendations to keep supermarkets honest in landmark report