CQ Today – Supermarket prices sting

The other day I bought a pack of Tim Tams at Woolworths and the price of $6 shocked me. $6 for 11 biscuits? Why is everything so expensive in Australia? Jump on Walmart in Canada’s website. Tim Tams are just $3.98 – or $4.08 in Australian dollars. Why is an Australian staple like Tim Tams almost 50 per cent more expensive here? Yes, you can find Tim Tams on sale here for cheaper, but the Walmart price is the full price in Canada. What is the reason for the difference? Well, Canada uses its oil and gas to produce cheap energy, while our Labor government locks up our resources. Tim tams take energy to make, transport and keep cool, as do almost all products. So the higher your energy costs, the higher your shopping trolley costs. But our high energy costs are just one reason. At the supermarket checkout, it’s not just biscuits costing families big bucks. Australia’s retail market remains one of the most concentrated in the world, with the two big supermarkets capturing 67 per cent of the market. This is one of the most highly concentrated markets in the world. The market power that Woolworths and Coles hold allows them to screw over our farmers and small businesses that have no choice but to supply to them. This hits innovation and investment in those sectors, making everything less productive and more expensive. But Labor does not want to take on the big supermarkets because they get cosy deals from them for big unions. Instead, Labor has adopted a fig leaf of a response with regulations that ban ‘price gouging’. If only we had thought of that! All we needed to do to stop crime was to make it illegal to break the law. It has been more than a year since the Australian Competition and Consumer Commission’s Supermarkets inquiry final report, yet key recommendations still haven’t been implemented by Labor. The report also warned grocery prices have increased by 24 per cent – more than other goods and services – and grocery prices are increasing at more than twice the rate of wage growth. Labor has also failed to act on ensuring that supermarkets provide fresh produce suppliers with greater transparency about the weekly tendering processes to negotiate price and volumes. No one in the Government can properly define price gouging, so it will not restrain the big major suppliers, which means Labor’s ‘ban’ on price gouging is just for effect. This so-called ban is just a distraction so that the big majors can get on with business without the oversight that would come from real competition law reform. The Nationals have long been calling for tougher action, including tough new penalties with $2 million on-the-spot fines, increased powers for the ACCC to conduct random audits, a Supermarket Commissioner to act as a confidential avenue and stop fear of retribution, and sector-specific divestiture powers, as a last resort to address the behaviour of supermarkets and to put an end to instances of price gouging. Almost every other advanced country in the world includes penalties to split up companies that continuously and egregiously break competition law. Australia is the outlier here, even though we have some of the worst competition outcomes in the world. Labor’s lack of action has come at an enormous cost to families and farmers during a cost-of-living crisis, with real wages back to 2011 levels. We all need to eat, and we all need to pay for food, so one of the best ways Labor could help families is to make real changes at the supermarket checkout.