By Binoy Kampmark
There are few economies on the planet more concentrated in terms of vital services and markets than Australia. The players and actors are few and far between, be they in banking, insurance, supermarkets, the media or the aviation market.
Disturbingly, many of these players believe they can operate with richly withering contempt towards those who need their services. The Australian consumer is but prey, their money the spoils for forms of behaviour that verge on the criminal. Were these same acts of deception, misrepresentation, and extortion committed by the layperson or common citizen, a charge sheet with civil and criminal liability would follow with speed. In Australia, a bonus and promotion await.
When it comes to shopping, consumers and suppliers are at the mercy of the Woolworths-Coles monopoly. These two titans control 65% of the market; Aldi sports a more modest 10% share, while the independent outlets scrap over the rest in localised settings. A shopper does not have to be too alert to realise that, within a certain radius, the same type of products sold in both chains will have almost identical prices. Discounts are mirrored, with only slight variation. (On one day, there will be a two for one special at Coles; at Woolworths, it will be half-price.)
These monsters of the squeeze insist that a fictional free market is at work, rather than a ruthless, cynical cartel which typifies Australian market practices. In February 2024, the then Woolies’ chief Brad Banducci made this stunning observation: “this community over here, there will be three Coles stores within two kilometres of it, at least one ALDI store, a series of independents, ability to within 24 hours have a quarter of our store delivered by Amazon – it’s an incredibly competitive market.”
Broadly speaking, 2024 has been a year of revelations about the blindingly obvious when it comes to the supermarket industry. The Four Corners investigation which aired in February did much to stir resentment and interest in the practices of the duopoly, noting eight ways in which the two chains exercise market muscle. Not one came as a surprise. Farmers, for instance, find themselves constantly underpaid for produce, given the lack of choice. This means that a Coles wallah dealing with thousands of fruit items can scoffingly select a few and either dismiss a consignment or ask for a reduced price.
Other practices of the smugly thuggish variety involved demanding additional sums for promotions (a point that made a mockery of any discount programs for customers); pressing suppliers to pay for in-house advertising (listen as you shop, and weep); the matching of prices; the constant justification of increased prices in such areas as supply chains, international freight, the growth of wages; and the purchasing of land in advance to prevent rivals occupying potential sites.
The Australian Competition and Consumer Commission (ACCC) had already been tasked in January by the Albanese government to investigate such conduct. Between February and April, it conducted seven round table discussions involving farmers and produce wholesalers, received over 80 public submissions, and engaged with over 21,000 customers across the country. On September 27, it released its Supermarket Inquiry Interim Report. (The Final Report is due early next year.) It’s unsurprising findings noted that Coles and Woolworths had “increased their number of stores, expanding their geographic coverage and increasing the number of supermarkets in existing coverage areas.”
In addition to the findings of the interim report, the ACCC is also taking legal action against Coles and Woolworths for allegedly making false of misleading statements to consumers on prices concerning 245 products between February and May this year for Coles, and regarding 266 products for Woolworths. These giants were evidently keen to spread the manipulation over products as diverse as toothpaste, chocolate, female hygiene products, breakfast cereal, pasta and cat food.
The alleged conduct involved an increase of the prices across the products on a temporary basis till being placed on what were called “Prices Dropped” promotions. Those prices were higher than, or similar to, the price for each product as ordinarily offered prior to the temporary price hike. As the ACCC states in its Federal Court filing specific to Woolworths, the supermarket chain “represented to consumers that the prices of Affected Products promoted on ‘Prices Dropped’ were discounted when, in fact, the purported discount was illusory.”
In an important area of the market that has remained, historically, under policed, the Albanese government finds itself pressed to make some contribution. A Food and Grocery Code is already in place but remains voluntary, mocked and subverted. The new scheme, currently open for consultation, will mandatorily involve the supermarket giants.
Wishing not to be forgotten or deemed redundant, the government has also funded a second price monitoring report published by the consumer advocacy group CHOICE, which recently found that a basket of Aldi groceries was $18 cheaper when compared to the same items available at Coles and Woolworths. (What a stunning surprise.)
Unfortunately, the prime minister is proving increasingly weak and flabby in terms of reforms. Increasingly, his government is one of demonstrable weakness, one easily cowed and susceptible to scarring capitulation. On foreign policy, his position is one of embarrassing subservience, notably to the United States. Much the same can be said about the environment, where responsible ministers remain ventriloquised by the interests of the mining industry. It remains to be seen whether anything comes of this forced moral concern about the predatory conduct of the famous supermarket duo.
