Woolworths, Coles hit back over supermarket price gouging proposal: 'Tackle the real factors'

Yahoo

30-03-2025

Coles and Woolworths want the government to focus on the "real factors" affecting Australian consumers after Anthony Albanese announced a crackdown on supermarket price gouging. The Prime Minister revealed on Sunday plans to introduce a law that would eliminate unfair prices "by the end of the year".
The change would hinge on Labor winning the May 3 election, but it would aim to keep prices on supermarket aisles from becoming excessive, especially if a certain product is in high demand. But the two biggest supermarkets believe the government has bigger fish to fry.
'Despite a 12-month inquiry into supermarkets, neither the government or the ACCC found evidence of price gouging,' a Coles spokesperson said.
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'What's needed are measures that tackle the real factors driving higher grocery prices, which are rising costs such as energy, fuel, labour, insurance, production, freight and distribution.'
Woolworths added that a recent investigation found there was no evidence of price gouging going on in the industry.
'Woolworths provided thousands of documents, millions of data points to the ACCC and several senior executives participated in public hearings as part of a 12-month-long inquiry into the supermarket sector,' a spokesperson said.Labor's pitch comes just a week after the consumer watchdog dropped a 441-page review of Australia's supermarket ecosystem.
The Australian Competition and Consumer Commission (ACCC) admitted that Coles and Woolworths had increased their price margins over the past few years but they weren't "excessive".
The ACCC stopped short of calling the supermarket industry a duopoly and instead said there was far less competition here compared to other countries, which hurt shoppers.
The watchdog made 20 recommendations to fix issues it found in the sector, which Labor has agreed to "in principle".
But Coles and Woolies weren't the only players firing up over the government's price-gouging proposal.
The Australian Retailers Association (ARA) referenced the ACCC's report and said inflation at the supermarket checkout has been driven by the higher cost of wages, energy prices, and fuel.
"Yet instead of hearing how the government will address these issues, which significantly affect all Australian retailers and consumers, we unfortunately see more taxpayer-funded deflection,' ARA chief industry affairs officer Fleur Brown said.
'The ARA calls on government to focus on policies that drive down the cost of doing business in Australia, which will have a direct impact on grocery prices and the cost of living for Australian families. We need measures that reduce red tape, increase productivity or drive down costs.'
Albanese spruiked the policy on the second day of the election campaign and said it would aim to crack down on prices that shoppers deemed excessive.
'I was asked today what price gouging is,' the Prime Minister said. 'It's when supermarkets are taking the piss.'
The law would work similarly to regulations in the European Union and US states, which prevent companies from abusing their market dominance.
If the rule is brought in by the end of the year, supermarkets could face hefty fines for non-compliance.
While Labor didn't reveal how much those fines would be, the harder part will be defining what price-gouging is, as the consumer watchdog's definition isn't clear.
'Prices that people think are too high, known as price gouging, or a sudden increase in price are not illegal,'' the ACCC website said.
'However, the business's behaviour around setting prices may be illegal if it harms competition in a certain way.
'It's also illegal for businesses to make false or misleading claims about prices, including the reason for any changes in prices.'
Coles and Woolworths are facing Federal Court action over allegations they broke Australian consumer law.
They are both accused of misleading consumers over the quality and value of the Down Down and Prices Dropped promotions on hundreds of supermarket items. They both deny any wrongdoing.Sign in to access your portfolio