The Select Committee on Supermarket Prices has issued a comprehensive set of recommendations aimed at reforming the supermarket sector to ensure fair competition, consumer protection, and supplier rights. These recommendations address various issues ranging from unfair trading practices to environmental concerns.
“This is a landmark report with serious proposals to tackle the price of food, and the profiteering that has done so much harm to the people of Australia,” Committee Chair, Senator Nick McKim said. “The committee has produced concrete steps that would tackle these problems head on. Chief amongst these is the recommendation that price gouging be made illegal. This would mean that corporations couldn’t just arbitrarily increase prices without facing consequences from the courts. This would be a significant new power to stop unreasonable pricing that has been rampant for years because of a lack of competition.”
A summary of the key recommendations from the committee include:
- Divestiture Powers and Price Gouging: The committee recommends amending the Competition and Consumer Act to establish divestiture powers specific to supermarkets in cases of market power misuse or unconscionable conduct. Additionally, legislative amendments are proposed to prohibit excess pricing (price gouging).
- Commission on Prices and Competition: The Australian Government is urged to establish a Commission on Prices and Competition with authority to monitor, investigate, and regulate supermarket prices and practices, ensuring transparency and fair competition along the supply chain. This includes publishing historical pricing data and conducting market studies.
- Food and Grocery Code of Conduct: The committee advocates for making the Food and Grocery Code mandatory, with strict penalties for breaches and protections against supplier retribution. This mandatory code should cover fresh produce, include enforceable rules overseen by independent arbiters, and provide improved information symmetry for suppliers.
- Merger Reforms: Recommended merger reforms include mandatory notification, reversal of clearance tests, and increased scrutiny to prevent actions that may lessen competition or facilitate land banking in the supermarket sector.
- Unit Pricing and ACCC Enforcement: Amendments to the Unit Pricing Code are proposed to enhance transparency and ensure compliance, with sufficient regulatory powers provided to the ACCC for enforcement.
- ACCC Funding and Powers: Increased funding for the ACCC is suggested to enable effective regulation, investigation, and enforcement of competition policy matters, along with legislative powers to compel necessary information.
- Food Waste Strategy and Employee Safety: Calls for updating the National Food Waste Strategy to address food waste in supermarkets, improve food labelling, and enhance employee health and safety standards.
- Further Inquiries: The committee recommends two inquiries by the Senate Economics References Committee, focusing on the role of multinational food manufacturers and ‘big box’ retailers in the supermarket industry.
Read the full report here.
