Senate inquiry issues 14-point plan to bust supermarket power

The Greens-led Senate inquiry into the supermarkets wants greater powers for the government, courts and regulators to crack down on the power of Woolworths and Coles including threats of breaking them up if they misuse market power.

The Senate inquiry into supermarkets has issued a range of recommendations to crack down on the power of Woolworths and Coles, lift competition and provide more insight into pricing. Picture: Stuart McEvoy

The Greens-led Senate inquiry into the supermarkets has unveiled its 14-point plan to crack down on the power of Coles and Woolworths that includes beefing up the powers of the consumer watchdog, threatening the retailers with a break-up and creating a “commission on pricing and competition” to investigate how groceries are priced.

In a 195-page report released on Tuesday, the Senate inquiry also recommends vast new powers for regulators to investigate, interrogate and enforce the way the nation’s largest supermarkets operate – such as changing the law to prohibit charging excess prices for goods, known as profit gouging, and making the chains disclose deeply guarded internal pricing data.

However, while the committee – made up of a cross-section of politicians from the Greens, Labor, Liberals, Nationals and independents – recommended the government create divestiture powers specific to the supermarket sector, it couldn’t agree on supporting the Greens legislation that would introduce economy-wide divestiture powers into competition law.

The release of the report follows months of submissions and public hearings before the Senate inquiry, led by Greens senator Nick McKim, which heard from supermarket suppliers complaining about the power of the chains and their treatment, as well as from the bosses of Woolworths and Coles who were forced to defend their business models.

The inquiry heard allegations of price gouging, suppliers squeezed on prices and anti-competitive behaviour such as sitting on empty land to stop a rival retailer building a competing store, known as land banking, which were all denied by both supermarket giants.

During one combative exchange at a public hearing, Senator McKim threatened to hold the Woolworths boss Brad Banducci in contempt which came with up to six months jail time for refusing to answer a simple question about a key Woolworths profit metric.

Now the inquiry, which the Albanese government gave the go-ahead for late last year, has issued its 14 recommendations to combat the power of the two supermarket giants, improve pricing transparency and give more powers to the courts and the Australian Competition & Consumer Commission to oversee and enforce new regulations and powers.

The committee recommended that, as a matter of priority, the government establish a Commission on Prices and Competition to examine prices and price setting practices of industries across the economy, and ­review government and other restrictions on effective competition that lead to high prices.

It has also called for the Competition and Consumer Act to be amended to prohibit the “charging of excess prices, otherwise known as price gouging”, merger laws to be strengthened, and the ACCC to receive more funding.

Originally published as Senate inquiry issues 14-point plan to bust supermarket power