Senate inquiry recommends powers to break up major supermarkets

Supermarkets should be forcibly broken up for abusing market power and price gouging made illegal, a Senate inquiry has recommended.

The Select Committee on Supermarket Prices was set up to scrutinise the impact of market concentration on food prices and the pattern of pricing strategies employed by the supermarket duopoly.

The Greens-chaired inquiry made 14 recommendations, with Greens Economic Justice spokesperson and Committee Chair Senator Nick McKim, stating it as 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.

“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.”

The committee’s recommended divesture powers for the supermarket sector would give the Federal Court the power to break up corporations when they abuse their market power or act unconscionably.

“Without the ability to break up the duopoly, our market will remain skewed towards the interests of a few powerful players and nothing will change.”

David Jochinke, President of the National Farmers’ Federation, welcomed the release of the report and the inquiry as an important opportunity to shine a light on the challenges being faced by many Australian producers.

“We’ve long argued that the Australian food and grocery supply chain lacks adequate competition. We see supermarkets and retailers using their market power to harm farmers through lower prices, unfair risk burden and supply uncertainty. This places significant pressure on small, family-run businesses.”

Other recommendations include measures to examine and monitor prices and price setting, address food wastage, standardise discount and promotional terms, examine the role of multinational food manufacturers in price increases, and provide additional powers to the ACCC.

“The Greens established this inquiry to bring food prices down and that is exactly what our recommendations will do.

“We’ve heard from farmers and suppliers about how the massive market power of Coles and Woolworths is allowing them to act unconscionably,” said McKim.

The supermarket sector is also currently under a 12-month price inquiry by the consumer watchdog.

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