Supply chain inquiry: How the agriculture industry reacted

A year-long inquiry into supermarket competition has been announced, with farmers urging the ACCC to look at “the whole supply chain”.

Australia’s agriculture industry has welcomed news of a consumer watchdog inquiry into the supermarket industry.

But scrutiny must be applied to the entire food supply chain to best examine the difference between farm gate prices and the cost of goods at the check out, industry leaders say.

Prime Minister Anthony Albanese on Thursday announced Treasurer Jim Chalmers would direct the Australian Competition and Consumer Commission to run a 12-month price inquiry into the supermarket industry, citing the “significant powers” of the watchdog “to examine the difference between the price paid at the farm gate, and the prices people pay at the checkout”.

A statement by the ACCC said the year-long inquiry would examine competition in the supermarket sector, and how it has changed since its last inquiry in 2008.

ACCC chair Gina Cass-Gottlieb said farmers were concerned about the “weak correlation” between farmgate and supermarket prices.

“We will use our full range of legal powers to conduct a detailed examination of the supermarket sector, and where we identify problems or opportunities for improvement, we will carefully consider what recommendations we can make to government,” Ms Cass-Gottlieb said.

National Farmers Federation president David Jochinke said news of the inquiry was welcomed, but hoped the ACCC would look at the whole food supply chain and “not just supermarkets”.

“The supermarket is the end of the supply chain, and very important, and they’re predominantly consumer-facing distributers,” Mr Jochinke said.

“But from the start, we’ve been interested in the whole supply chain. We need to look at the price disparity between the farmgate and what retailers sell for, and to understand those nuances to empower farmers to make better decisions.”

A suite of recommendations and enforceable measures would be an ideal outcome from the inquiry, Mr Jochinke said.

“Enforceable changes, and a clear understanding of the supply chain through better transparency, or giving more strength to the ACCC to continually investigate and monitor on behalf of the consumers – that’d be an ideal outcome,” he said.

Leader of the National Party David Littleproud has been calling for an ACCC inquiry for weeks. Picture: Martin Ollman

Opposition agriculture spokesman and leader of the Nationals David Littleproud has been calling for an ACCC inquiry in recent weeks, with a particular focus on price discrepancies for meat and fresh produce at the farm gate compared to the supermarket.

“The ACCC has the powers to properly investigate as part of a dedicated inquiry to ensure fairness for farmers and consumers and it’s only because they’ve been shamed into action that the government has acted,” Mr Littleproud said.

“Under section 95, the Treasurer has the legislated power to direct the ACCC and give it strong powers to compel witnesses and recommend harsher penalties.”