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.
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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.
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