Australia’s supermarket industry is heavily dominated by Woolworths and Coles, according to the ACCC’s Supermarket Inquiry report, with the Australian Small Business and Family Ombudsman (ASBFEO) calling for support for small grocery businesses.
The report found that Coles and Woolworths have substantial advantages in securing new supermarket sites and acquiring fresh produce. The ASBFEO said its own findings agreed with the ACCC’s, and said that this emphasised the need for its ’14 steps to energise enterprise’ endeavour for small businesses.
“Just as a lost visitor seeking directions might receive the wry response: ‘Well, I wouldn’t start from here’, so those looking for a properly functioning supermarket sector — capable of delivering durable best value for consumers and a fair go and fully respectful commercial dealings between suppliers and big retailers — would not start from here,” ombudsman Bruce Billson said.
“But we are where we are, and we must stay vigilant seeking to improve the competitiveness and fairer conduct between the parties in the highly concentrated supermarket sector.”
Woolworths’ and Coles’ promotional practices and loyalty programs can be confusing to consumers, the report also said, as it can be difficult for buyers to assess the value they receive.
The ACCC recommended that these large chains should be required to publish prices online, with dynamic pricing added, and suggested the introduction of new supermarket merger regulations.
Loyalty programs would also face new transparency requirements under the ACCC’s suggestions, as well as notify consumers of shrinkflation in supermarket products.
The ASBFEO’s ’14 steps to energise enterprise’ initiative was announced last month, with the goal of supporting Australian small businesses. This would include a tax discount or offset for these businesses, and introduce new regulations to aid competition.
The ASBFEO will also arrange arbitration under the newly added Food and Grocery Code of Conduct, beginning on 1 April.
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