Australia’s major supermarkets will be ordered to front up to a senate inquiry examining whether customers are being subjected to “price gouging” during the cost-of-living crisis.
Many families have buckled under the pressure of consecutive interest rate rises this year, with mortgage payments pushed up, rents rising and weekly budgets tightened.
The select senate inquiry will scrutinise the impact of market concentration on food prices and the pattern of pricing strategies employed by the supermarket “duopoly” – Coles and Woolworths.
It will also assess the rise in essential item prices, the validity of discounts offered, and the inflation of profits during economic hardship.
The inquiry is expected to be established next week as Parliament sits for the final time this year, after the Greens secured Labor’s support.
Initial hearings are tipped to take place in early 2024.
“Coles and Woolworths are making billions in profits by price gouging in a cost of living crisis,” Greens Economic Justice spokesman Senator Nick McKim said.
“For too long the big supermarkets have had too much market power. This allows them to dictate prices and terms that are hitting people hard.”
“It’s time to smash the duopoly.”
The inquiry will examine the price setting practices between the two major supermarket chains, the large increase in price of essential items, as well as the prevalence of opportunistic pricing and mark-ups.
The contribution of home brand products to the concentration of corporate power, rising corporate profits and the use of automation to extract cost-savings from consumers and employees will also form part of the inquiry.
Mr McKim called on the supermarket chief executives to “justify their decisions” in the public hearing, expected to be held next year, and said it would be a “critical step” towards dismantling market concentration.
“We’ll find a way to dismantle their power and bring grocery prices down,” he said.
“It is about that Australians can afford to eat without being exploited, and that suppliers are treated fairly.”
A Woolworths spokesman said the supermarket is “committed to offering our customers value while working with our suppliers to manage economy-wide inflationary pressures”.
“We know Australians are feeling the strain of cost of living and we are working to deliver relief in their weekly grocery shop,” he said.
“As we start to see the rate of inflation ease, we will continue to focus on delivering savings to our customers.”
A Coles spokesperson said they “believe all Australians should be able to put quality food on the table for their families, at a good price.”
They said having a “profitable business” means they can continue to serve Australians and employ their team of 120,000 staff.