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May, 2024

Supermarket Senate Committee calls for price gouging laws, proposes radical overhaul of pricing and competition regulation

The Greens-led Senate Select Committee on Supermarket Prices has proposed a radical overhaul of Australia’s supermarket sector, including making price gouging illegal and introducing divestiture laws to break up the duopoly of Coles and Woolworths.

Off the back of the recent Supermarket Senate inquiry held over the last couple of months, the committee has made 14 recommendations, including legislative amendments to section 46 of the Competition and Consumer Act 2010 to prohibit price gouging.

The committee’s recommendations also include the establishment of a Prices and Competition Commission which could examine and monitor prices and price setting as well as require supermarkets to publish historical pricing data. Under the proposal, the Commission would also be able to conduct market studies to review restrictions on competition, access historical data to ensure it’s transparent to suppliers and consumers, and publish reports.

It’s also asking for the Food and Grocery Code of Conduct to be mandatory, as well as called for the Australian Competition and Consumer Commission (ACCC) to gain additional powers to investigate land banking and unfair trading practices. Supermarkets would also be required to adopt mandatory standards for unit pricing, as well as notify customers of changes in sizes or prices of products, to help prevent shrinkflation.

“This is a landmark report with serious proposals to tackle the price of food, and the profiteering that has done so much harm to the people of Australia,” said Greens Economic Justice spokesperson and Committee Chair Senator Nick McKim. “The committee has produced concrete steps that would tackle these problems head on.”

Chief amongst these is the recommendation that price gouging be made illegal. “This would mean that corporations couldn’t just arbitrarily increase prices without facing consequences from the courts. This would be a significant new power to stop unreasonable pricing that has been rampant for years because of a lack of competition,” McKim said.

The committee also recommends the introduction of divestiture powers for the supermarket sector, which would give the Federal Court the power to break up corporations when they abuse their market power or act unconscionably.

“The Greens established this inquiry to bring food prices down and that is exactly what our recommendations will do,” McKim said. “We’ve heard from farmers and suppliers about how the massive market power of Coles and Woolworths is allowing them to act unconscionably. Without the ability to break up the duopoly, our market will remain skewed towards the interests of a few powerful players and nothing will change.”

The committee also recommends the government standardise discount and promotional terms, back stronger health and safety standards for supermarket employees, further investigate the role of multinational food manufacturers in price increases, and update the National Food Waste Strategy.

The Greens have already put a bill before Parliament calling for the divestiture powers and has again called on the Federal Government to back it.