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Supermarket probe to be headed by former Labor minister

A probe into supermarket dealings with suppliers has been detailed in a new paper.

A probe into supermarket dealings with suppliers has been detailed in a new paper. Photo: Getty

Former Labor minister Craig Emerson will lead a probe into Australia’s major supermarkets amid accusations of price gouging in a cost-of-living crisis.

The federal government will on Wednesday announce Emerson to head the Food and Grocery Code of Conduct review into Coles, Woolworths, Aldi and Metcash, which operates IGA.

Amid growing political pressure over rising grocery prices, the government will also release one part of the review and its response on Wednesday.

Emerson served as competition, trade and small business minister between 2007 and 2013 and is well known for singing a parody of the Skyhooks’ 1974 hit Horror Movie at a press conference on the carbon tax.

The review, announced in October, is expected to examine whether the supermarket industry code is helping improve standards of business behaviour in the sector and may lead the government to strengthen consumer rights.

The code regulates the conduct of retailers and wholesalers towards suppliers.

Prime Minister Anthony Albanese said the review was one of the ways the government was looking to bring down the cost of goods at the supermarket.

He said the review would examine whether elements of the code of conduct would need to be made mandatory.

“We know that when we’ve seen a reduction in the cost to supermarkets, that hasn’t been passed on in an appropriate way to consumers, and we want to make sure that happens,” he told ABC TV on Wednesday.

“Everything is on the table because we want to make sure that customers benefit.”

The review, announced in October, comes as farmers are urging customers not to blame them for soaring grocery prices.

There are growing concerns about the gap between what farmers earn and the prices charged by supermarket as the grocery giants posted billion-dollar profits in 2023.

Coles posted $10.25 billion in first-quarter sales in 2023, a 3.6 per cent rise compared to the first quarter of the 2022 financial year, while Woolworths’ revenue grew by 5.3 per cent for a total of $17.2 billion.

The review is expected to examine whether the supermarket industry code – which regulates the conduct of retailers and wholesalers towards suppliers – is helping improve standards of business behaviour in the sector.

It may lead the government to strengthen consumer rights.

There are growing concerns about the gap between what farmers earn and supermarket prices as the grocery giants posted billion-dollar profits in 2023. 

Agriculture Minister Murray Watt said supermarkets needed to be more open about their pricing arrangements.

“At the moment, we do see supermarkets have a lot of market power when it comes to their negotiations with farmers and their other suppliers,” he told ABC Radio.

“The voluntary arrangements we’ve got in place may not be doing enough to ensure that supermarkets are being fully transparent.”

Senator Watt said falls in the wholesale price of produce should be passed on to shoppers.

“It’s just not fair for consumers to be paying high prices for goods at supermarkets when farmers aren’t receiving good prices at the farm gate,” he said.

“It makes it very difficult for farmers to work out what kind of price they should be charging for their goods, it leaves them in a very weak bargaining position.”

Deputy opposition leader Sussan Ley said consumers needed more immediate relief at the checkout.

“I don’t think as families are pushing their supermarket trolleys around filling up for the new year, wondering  about those back to school prices … they’re going to be reassured by a review of a code of conduct,” she told Sky News.

“This is all about bringing prices down, not reviewing what supermarkets are doing.”

The government will also release one part of the Food and Grocery Code of Conduct review and its response on Wednesday.

The supermarket giants are expected to face a grilling when Coles and Woolworths front a parliamentary inquiry into price gouging, record profits and cost-of-living pressures in the coming months. 

Independent MP David Pocock said lack of competition had a “devastating effect” on farmers and suggested supermarkets display the farm gate price on shelves.

“It would be a real reminder for Australians of how little farmers are getting in some cases and can potentially (be) an incentive for the major supermarkets to work with their farmers,” he told ABC radio on Tuesday.

“It comes to the government and the parliament to ensure that there are the right laws in place (so) that there is more choice and we see smaller players able to enter the market and not just then be snapped up by these bigger companies who are making big profits while a lot of Australians are really struggling.

“This is something that we need to deal with, but this is not a new issue.”

-with AAP

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