The competition watchdog has found no definitive evidence of price gouging by Coles and Woolworths. A year-long probe has found Australia’s supermarket rank among the most profitable in the world but stopped short of declaring prices excessive. Suppliers are disappointed, saying they would like to see a fairer deal.
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00:00As food prices spiralled, supermarkets got the blame, prompting the ACCC's inquiry.
00:08To make sure that Australians are not paying $1 more than they should.
00:13We want them to be profitable, but we can't have price gouging.
00:17After a year and millions spent, the Consumer Watchdog says...
00:22Price gouging is a very difficult concept.
00:24Actually drawing a line on whether or not prices are excessive or not is very difficult.
00:29The Watchdog also didn't say the big two have a duopoly, saying there is limited competition
00:35from Aldi.
00:36Look, it's David and Goliath.
00:37If they don't pay us enough, then we're struggling to pay our farmers enough at the same time.
00:42As suppliers struggle, supermarket margins are rising, especially on packaged and branded
00:48products.
00:49Apples, bananas and eggs get resold for more than 30% of their cost.
00:54Potatoes have a margin that's higher than 40%.
00:58While dog food and dishwashing tablets also offer big margins.
01:03Margins are different to profits.
01:05Australia, the ACCC notes, is one of the most profitable places in the world to operate
01:11a supermarket.
01:12I basically only buy things when they're on sale.
01:15If it's not on special, it's pretty expensive.
01:18I shop around to get specials, never buy things at full price.
01:23Coals are confusing customers, the Watchdog says.
01:26It's separately taking Coles and Woolworths to court over allegations that they're putting
01:30out fake discounts.
01:32Clearer labelling and a review into loyalty schemes are some of its 20 recommendations.
01:39We accept all of those recommendations in principle and in most of those areas, we are
01:44already taking substantial steps.
01:46But the government's only extra announcement on releasing this report is $3 million to
01:51help suppliers.
01:53$3 million won't go very far.
01:55The opposition is agitating for farmers.
01:58We believe in successful businesses, but it's got to be in competitive markets.
02:02Woolworths and Coles say that their sector is competitive.
02:06Clearly investors aren't worried about looming regulation.
02:09Both of these companies' stocks surged today as this report was released.