Sector welcomes spotlight on supermarket prices

Posted on 16 Jan 2024

By Greg Thom, journalist, Institute of Community Directors Australia

As the new year sets in, time may have run out for supermarket chains who have been accused of making massive profits while farmers and consumers do it tough amid the cost-of-living crisis.

The increasing price of groceries has hit households particularly hard, prompting unprecedented demand on overwhelmed charities struggling to offer food relief.

In August 2023, the Guardian reported that Woolworths had increased its full financial year net profit by 4.6% to $1.62 billion. This amount included revenue from its New Zealand supermarkets and from Big W, but it was powered by an almost 20% rise in earnings from its Australian supermarkets.

After enormous pressure to act, the federal government and unions have launched multiple inquiries into supermarket pricing and practices, including:

an ACTU-backed inquiry into price gouging headed by former Prices Surveillance Authority and Australian Competition and Consumer Commission (ACCC) chief Alan Fels
A Senate Inquiry into the market power, lack of competition and pricing practices of the major supermarkets
a review of the Food and Grocery Code of conduct by former federal government minister Dr Craig Emerson.

Federal Treasurer Jim Chalmers has also held talks aimed at triggering a possible ACCC inquiry into supermarket prices.

“Many Australians are doing it tough and some have been forced to turn to charities like ours just to get by.”

Anglicare acting executive director Maiy Azize.

The government focus on getting to the bottom of supermarket pricing was welcomed by Anglicare acting executive director Maiy Azize, who said the cost of living is soaring.

“Many Australians are doing it tough and some have been forced to turn to charities like ours just to get by,” she said.

“Anglicare Australia’s Living Costs Index shows that people are already struggling to keep up with spiralling rent and childcare costs. They can’t afford to pay more for food and groceries as well.”

Ms Azize said supermarkets shouldn’t be allowed to line their pockets at the expense of people doing it tough.

“They should be passing on savings to their customers – and they need to come clean about how they price their products.”

For months, charities and not-for-profits have been the loudest voices in the room as they’ve called out the impact of rising prices on disadvantaged Australians.

In June 2023, Anglicare Australia executive director Kasy Chambers used damning statistics contained in her organisations Living Costs Index to call for a plan to stop Australia’s lowest paid workers being pushed into poverty.

The annual index revealed that a family of four with two full-time minimum wage workers was left with just $73 a week after paying for rent, transport and food.

Shopping — Supermarket prices are under scrutiny amid Australia's cost-of-living crisis.

From Vinnies to Foodbank and the Australian Council of Social Services, the NFP and charity sector has stood up for the rights of disadvantaged Australians.

According to the recent ACOSS report It’s Not Enough, last winter:

an estimated 73% of Australians cut back on heating or cooling their homes because of a lack of funds
about 62% of people minimised using lights
more than 60% admitted they found it difficult to afford the medicine or medical care they need.

St Vincent de Paul has been overwhelmed by those in need – particularly when it comes to food insecurity, with almost 59% of calls to its welfare line food related.

Statistics by the Salvation Army released in December revealed an estimated 5.3 million people feared they would not be able to afford a Christmas meal.

The Salvos’ research found that 57% of people planned to spend less on food this year, with one in seven parents worried their children would go without a meal on Christmas Day.

In response, the Salvos distributed tens of thousands of food hampers and served more than 132,000 meals to those struggling to make ends meet over the festive season.

In February 2023, Australia’s major food relief organisations – OzHarvest, Foodbank and SecondBite – jointly called on the federal government to address historic underfunding of the sector to ensure it could address the ever-rising levels of demand.

Foodbank Australia CEO Briana Casey said at the time that demand for food relief continued to increase in Australia.

“We are seeing more and more everyday Australians reach out for help.

“These are people with jobs, double incomes, mortgages, but the cost-of-living crisis is impacting them too and many find themselves asking for food relief for the first time.”

Ms Casey said on a typical day, half a million Australian households were struggling to put food on the table, with 306,000 households gaining access to food relief.

“This is a gap that is growing, and we need federal support to fill it.”

In an interview with the Community Advocate last year, Professor Fels said large scale food and grocery retailers were firmly in the sights of his price gouging inquiry.

He said he empathised with the strong stand taken by the charitable sector in going into bat for Australians struggling to make ends meet because of high inflation – a situation made worse when firms engaged in profiteering.

“The fact that there is high inflation in itself makes price exploitation possible because there’s confusion in the public mind about what’s general inflation and what else may be influencing pricing behaviour,” said Professor Fels.

Commenting on the announcement of a review of the Food and Grocery Code of Conduct, Charities Minister Andrew Leigh said Dr Emerson would bring wisdom and compassion to what he described as a vital economic reform.

“In the 1990s, the Keating government’s competition reforms raised household incomes by $5000. History shows competition reforms can change lives for the better,” said Mr Leigh.

“Capitalism depends on competition. Monopolies gouge consumers and workers and undermine fairness. Competition means better prices and more choice for Australian families.”

More information

Price wise warrior back in the saddle

Subscribe to the Community Advocate, our weekly newsletter