The national competition watchdog is giving farmers, food processors and shoppers a month to vent their collective spleen about supermarket pricing tactics, market buying power, grocery supply chains and more.
The Australian Competition and Consumer Commission has officially launched its 12 month investigation into supermarket pricing practices and the relationship between wholesale, farmgate and retail prices.
It will examine supermarkets' operating expenses and profits and differences between prices paid to suppliers, and the prices paid by customers at the checkout.
Big supermarket player, Coles, this week announced its first half revenue for 2023-24 grew three per cent to $22.3 billion, although net profit dropped 8.4pc to $589m.
Last week its larger rival, Woolworths Group, posted a profit rise to $929m for six months to December 31 - up from $907m a year ago.
The ACCC has put a call out to customers to report how and where they choose to buy groceries, what they buy and particular concerns they have about supermarkets.
It also launched an online survey for anonymous feedback, which takes about 10 or 15 minutes to complete.
Among other things, the ACCC inquiry plans to explore the extent to which supermarkets analyse shopper and supplier data to make price and product range decisions.
Use of pricing algorithms, customer profiling and whether or not retailers coordinated pricing strategies would be under the microscope.
The regulator has noted data developments in the past decade could help retailers respond quickly and easily to price changes by competitors, but they may also cloud price transparency.
In a 22-page issues paper, the ACCC said efficient supply chains were crucial to ensuring grocery markets worked well for consumers, suppliers and the wider economy, with inadequate competition potentially meaning lower prices for farmers and higher prices for shoppers.
The inquiry wanted information and views from all levels of the supply chain, including details on differences between farmgate and store prices, and any competitive pricing impediments within the supply chain.
Specifically, suppliers were urged to open up about contract processes and negotiations; contract lengths, quality thresholds and supply flexibility; the extent to which farmers could realistically exercise their contract rights and options; pricing terms (fixed or variable) and methodologies used to determine prices, including cost pass-through allowances; rebates; contract periods, and how transport and distribution costs differed between buyers.
Feedback on buyer power, including the ability of supermarkets to demand lower prices, or transfer the risk and costs for the goods they bought, and other factors impacting production margins and costs would also be welcomed.
Individual business and public submissions and consumer survey responses must be completed by April 2.
The ACCC is expecting to release its interim investigation report to Treasurer, Jim Chalmers, in late August and release its final findings on February 28 next year.
Meanwhile, public hearings conducted by a senate inquiry into supermarket pricing start in Hobart next week, and a review of the voluntary Grocery Code of Conduct is also underway under the eye of former Labor government small business minister, Craig Emerson.
You can have your say on the supermarkets on the ACCC website.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
