00:00The ACCC Supermarket Inquiry report has concluded that the likes of Coles and Woolworths have
00:08so much power here in Australia that they really aren't forced to compete too hard on
00:13price. The report also notes that Australia's supermarket sector is one of the most profitable
00:20in the world. The watchdog actually forced the likes of Coles, Woolworths, Audi and the
00:26operator of IGA's Metcash to give up pricing data for its inquiry. That was one of the
00:32really interesting things about this and it's now analysed this pricing data and in this
00:38report it notes that for Coles, Woolworths and also for Audi that margins have actually
00:44been ticking up the last five years. It says with Coles and Woolworths this is specifically
00:49happening on branded products as opposed to its home brand no label products. Now margins
00:56are very different to profits. The ACCC notes this. It also notes that the supermarkets
01:02have had a lot of costs imposed on them the last five years. We obviously had this inquiry
01:09called as the cost of living pressures and grocery prices have been rising the last couple
01:15of years especially during the pandemic. The ACCC stops short of saying that grocery
01:20prices in Australia are excessive. It also doesn't conclude that Coles and Woolworths
01:26have a duopoly and that's interesting because that's been a really big allegation the last
01:30couple of years that we've heard to the extent that Coles and Woolworths now have this acronym
01:34for them called Colesworth. The ACCC does note though that the supermarket sector in
01:39Australia is an oligopoly. That means few players and it says this is specifically having
01:47issues with price competition. So Amelia what has the watchdog recommended and at this stage
01:53do we know if the government is committing to any of it? So the ACCC makes 20 recommendations.
02:01Some of the interesting ones that it's recommended include pricing data to be disclosed. It would
02:07be interesting to see how this could be done in Australia if it would be like along the
02:12lines of the way that petrol prices are disclosed. The ACCC also notes that loyalty programs
02:18have been very confusing for consumers in Australia. It wants a review of those in three
02:23years time and it wants something done about shrinkflation. Now this is this idea where
02:29a packet of chips gets smaller but the price stays the same. It says it's quite hard to
02:34look at shrinkflation in Australia and it would like something done about this. It also
02:38notes that it would like a range of things done for suppliers. There was a lot of concerns
02:45raised especially by farmers in during this inquiry. Now the federal government which
02:50asked the ACCC to do this inquiry it has had this report for almost a month now. It put
02:57out a statement last night saying that it welcomes this inquiry that in principle it
03:02agrees with these 20 recommendations. But they haven't actually said they will do this.
03:07The federal government has already increased merger powers for the ACCC. It gave them an
03:13extra $30 million in funding at the end of last year to help them tackle the supermarket
03:18sector. When this report has now been released the federal government has given an extra
03:24$3 million it says in next week's budget to help suppliers take on the supermarkets.
03:30And this morning have we heard from the government? And what about the supermarkets? Have they
03:34said anything?
03:36So we've had the Treasurer Jim Chalmers talk about this report this morning. As I noted
03:42the federal government hasn't actually committed to all of those 20 recommendations but says
03:47it agrees with them in principle. Here is the Treasurer speaking just this morning.
03:52We're implementing a bunch of them already. Whether it's unit pricing, competition, planning
03:57and zoning, food and grocery code, empowering and funding the ACCC. We're also funding the
04:04supplier groups to empower them to strengthen their arm in the negotiations with the big
04:10supermarkets. So this is all about cracking down on the supermarkets. We know that people
04:15are still under a pressure and a lot of that pressure is felt at the checkout.
04:20So that's the federal Treasurer noting that they believe they have done a lot already
04:24to tackle the supermarket sector in Australia. So far this morning we've heard from one of
04:30the major supermarkets Coles. As I noted the ACCC raised some ideas that margins have been
04:37rising in the last five years with the supermarkets. Coles says no, they're very competitive, they
04:42think they're doing the best for consumers. We expect to hear more from the supermarket
04:46sector this morning.
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