Australia to investigate supermarket prices

Supermarket are set to face a pricing investigation by the competition watchdog, as announced by Prime Minister Anthony Albanese on Thursday. In a speech outlining Labor’s new income tax plan at the National Press Club, Albanese disclosed two measures aimed at addressing the issue of rising grocery prices. The Australian Competition and Consumer Commission (ACCC) will conduct a 12-month price inquiry, and $1.1 million will be allocated to the consumer group Choice to assist shoppers in understanding if they are being overcharged by supermarkets.

This move comes in response to heightened scrutiny of grocery prices, particularly following increased margins that contributed to Coles’ $1.1 billion full-year profit and Woolworths’ boosted annual profit of $1.6 billion. Albanese stated that Treasurer Jim Chalmers will direct the ACCC to investigate the supermarket industry comprehensively, examining factors such as online shopping, loyalty programs, technological changes, and the discrepancy between farm gate prices and consumer prices at the checkout.

Albanese emphasized the principle that when farmers receive lower prices for their products, supermarket should pass on the benefits to Australian consumers by charging less. Woolworths Group CEO Brad Banducci welcomed the inquiry, expressing the company’s readiness to assist the ACCC in its investigation.

Labor had previously appointed Craig Emerson to lead a review of the grocery code of conduct, highlighting discrepancies between prices paid to farmers and consumer prices. Albanese’s announcement of the ACCC inquiry aims to address potential price-gouging claims, with a focus on promoting transparency, enhancing competition, and ensuring Australians are not overcharged for essential goods.

Additionally, Albanese revealed that Choice will receive funding to provide shoppers with clear information on how supermarkets are performing regarding pricing. The intention is to promote transparency, competition, and value for consumers. Albanese concluded by sending a clear message that the government is committed to taking action to ensure Australians are not paying more than necessary for essential items.

While the Nationals leader, David Littleproud, welcomed the inquiry, he suggested that Labor had been prompted into action due to public pressure. Opposition leader Peter Dutton criticized Woolworths for discontinuing Australia Day merchandise, asserting that companies should focus on delivering value to shareholders and customers rather than engaging in social causes.

Albanese countered by highlighting Labor’s efforts to address the cost of living crisis through targeted measures such as energy bill relief and increased rent assistance. He indicated that the new tax cuts are part of ongoing actions to alleviate the financial burden on Australians, with further assistance expected in or before the May budget.

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