Nick Rheinberger:
Good luck keeping shopping trolley full of groceries under a few hundred dollars these days, as feeding a family or sometimes just yourself can be expensive. Now, we know inflation has shot food prices up, but despite the ACCC releasing a report last year – never directly accusing the big 2 of price gouging – it said there was very little incentive for them to compete vigorously.
The federal government’s just released a consultation paper, and they’ve got a few ideas when it comes to improving the transparency of pricing and they want your feedback. Joining me now is Dr Andrew Leigh, Assistant Minister for Productivity, Competition, Charities and Treasury. Andrew Leigh, good day.
Andrew Leigh:
G’day Nick, how are you?
Rheinberger:
Not too bad. What does this consultation actually explore, and how might it help reduce prices?
Leigh:
Well, this is another step in our measures to hold the big supermarkets to account Nick. As you said, they’ve got a pretty big market share – about two‑thirds of the market, and even with the entry of Aldi, they’ve maintained that significant market share. So, this consultation will explore a range of proposals, including requiring large supermarkets to publish prices online, to allow web scraping technologies for price comparison tools.
We’re looking at whether very large supermarkets should provide members with more information about the monetary value of their loyalty programs and whether all supermarkets – and this particularly applies to those smaller remote stores – should be required to publish prices in‑store.
Rheinberger:
I remember years ago, pricing changed where you had to look at the price per kilo or per item, you know, rather than just making it easier to compare prices. Are there still examples of confusing pricing displays that you need to look at?
Leigh:
Yeah, as part of this crackdown on shrinkflation we’re looking at the unit pricing code of conduct and the way in which that sometimes confuses shoppers, sometimes the font size is too small, or the units are different. One is per 100 grams, one is per kilo. We’re also looking at whether it should be a requirement to publish shrinkflation notifications, in other words, to tell shoppers if the size of the packet’s gone down while the price has stayed the same.
And then alongside that, we’re making supermarket price gouging illegal and funding CHOICE to provide quarterly information to shoppers on where they can get the best deal.
Rheinberger:
Well, how do you define gouging?
Leigh:
Well, it’s going to be a matter for the courts and the ACCC. It’ll be a question…
Rheinberger:
Is it a matter of how you write the law?
Leigh:
The law will be general and principles‑based, as our competition and consumer laws are, and then the particular determinants will turn on the facts of the case in front of them. These are provisions that exist in other countries – we’re not the first country to be looking at price gouging. And so if you look at the UK, Europe, some US states, they’ve got price gouging provisions in place already, and they’ve…
Rheinberger:
Worked effectively in those cases?
Leigh:
Look, I think they help. There’s no magic bullet in this area, which is why I ran you through a whole host of the things we’re doing, and I’m only talking about the consumer side at the moment. There’s also a tonne of things we’ve been doing on the supplier side: making the food and grocery code mandatory with multi‑million‑dollar penalties and resourcing suppliers and so, they’re able to better take on the big end of town. Because those big supermarkets are not only potentially squeezing customers, they may also be squeezing their suppliers.
Rheinberger:
What sort of feedback are you looking for?
Leigh:
We’re looking for information as to how consumers have found their interactions with the big supermarkets. And of course, we’ll be consulting with those supermarkets themselves, particularly some of those technical details around record keeping, web scraping technologies. We want to make sure we get things absolutely right. But we do know that these large supermarkets have maintained a big market share. With the entry of Aldi over a decade ago, was thought that it would reduce the market share of the big 2, but in fact what we’ve seen is that as Aldi and Costco have grown some of those independents – the Metcashes IGAs, Supabarns, have shrunk a little and so the big 2 have maintained their share of the supermarket market.
Rheinberger:
All right. Andrew Leigh, good to talk to you today. Thanks very much.
Leigh:
Likewise, thanks Nick.
Rheinberger:
That’s the Assistant Minister for Productivity, Competition, Charities and Treasury.