Price gouging report to be released this week

ABC NEWS (Australia)

A report into soaring grocery prices, rising energy bills and steep airfares will be released this week, with the findings expected to cause a headache for some of the country's biggest and most powerful companies.

Transcript

00:00 Price gouging is not illegal in Australia.

00:05 What it is, is it's really a term used for if it's unfair and unreasonable.

00:11 So for instance, if there's a supply problem with bananas and inflation, but they're $10

00:18 a banana, that's price gouging.

00:20 So they're taking unfair advantage of customers.

00:24 But it's not illegal.

00:26 In terms of submissions, what do we know about the number and the nature of them?

00:30 Yes, so there are over 750 submissions.

00:34 More than half of them came from ordinary Australians talking about supermarkets and

00:39 their experiences and just how tough it is out there, which is quite phenomenal really

00:44 that so many people have put in.

00:46 And what was interesting about the submissions is they really weren't asking business or

00:50 lobby groups to put in.

00:52 So it was really charities, people who are doing it tough.

00:55 Yeah, and a lot of people are at the moment, as we know.

00:58 Many industries are oligopolies in Australia.

01:01 That is, fewer companies rather than competition.

01:05 Why is that a problem?

01:07 It's a problem because when you don't have a lot of competition in an industry, they

01:13 have power.

01:14 So they can basically set prices, not necessarily collude, but they don't have to spend money

01:20 on innovation and marketing.

01:23 And they don't have to put prices down quick enough.

01:25 So an example was last year, you had cattle prices which had fallen about 70 per cent.

01:32 Lamb had fallen 75 per cent.

01:35 People were going into the supermarkets saying, "Why aren't the prices being reflected when

01:40 I'm buying my meat?"

01:42 And then Woolworths decides to have a marketing campaign where they say, "We're going to offer

01:47 our customers a special Christmas gift of reducing the price of lamb."

01:53 If you had a competitive market, you wouldn't be doing that.

01:55 You'd just be lowering the price immediately.

01:59 Now Professor Fell's recommendations will be sent to the government, of course.

02:03 What will the message be here?

02:04 The message will be, we need more regulation, we need more transparency and tougher penalties.

02:11 [BLANK_AUDIO]

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