Huge growing cost of grocery basket confirmed
Written by admin on September 27, 2024
The price of a typical basket of groceries has increased by more than 20 per cent in the past five years, with low-income households currently spending more than a fifth of their income on food, a highly-anticipated report into supermarkets has found.
While prices across all grocery product types had increased, the most considerable hikes were in dairy products (32 per cent) and bread and cereal items (28 per cent).
Meat and seafood had increased by a fifth, while the price of fruit and vegetables had increased by 19 per cent between the March 2019 quarter to the June 2024 quarter.
The findings were released in the Australian Competition & Consumer Commission’s interim report into the supermarket sector and whether supermarket giants were dudding suppliers and ripping off customers due to a lack of competition.
The report found many consumers were facing “excessive” prices, with many shoppers buying less food and focusing on cheaper products in order to stay within their budgets.
Shoppers were also eating less frequent and smaller meals, and changing their habit by “increasingly” comparing online prices before going in-store, however faced “real difficulties” with comparing prices.
As a result, ACCC deputy chair Mick Keogh said Australians were “losing trust in the sale price claims by supermarkets”.
“These difficulties reportedly arise from some of the pricing practices of some supermarkets,
such as frequent specials, short-term lowered prices, bulk-buy promotions, member-only
prices and bundled prices,” he said.
In Australia, Woolworths and Coles contribute to 67 per cent of supermarket sales, with Aldi accounting for 9 per cent and independently franchised IGA, owned by Metcash, contributing to 7 per cent.
While the ACCC did not release any recommendations, and will only do so in its final report due in February 2025, it said its upcoming proves will question whether dominant grocers have abused their market power to inflate prices.
The ACCC will also provide detailed analysis on 14 everyday products including beef, chicken, pork, bananas, apples, strawberries, cucumbers, potatoes, eggs, milk, cereal, biscuits, pet food and dishwashing tablets.
“We will examine whether supermarkets are exercising market power to increase retail
prices more than is necessary to accommodate increases in the wholesale prices
supermarkets pay,” Mr Keogh said.
“We are also examining whether supermarkets are engaging in other business practices that
may cause detriment to consumers or suppliers.”
Prime Minister Anthony Albanese said the report would be studied “closely” by the government.
On Monday, Mr Albanese released the draft exposure mandatory Food and Grocery Code of Conduct for companies which record more than $5bn in revenue and includes penalties of up to $10m.
It also followed the ACCC launching legal action against Coles and Woolworths over allegations of misleading consumers by inflating prices, before discounting and advertising products as falsely reduced.
More Coverage
“Customers don’t deserve to be treated as fools by the supermarkets. They deserve better than that,” he said.
Assistant Minister for Competition Andrew Leigh said the watchdog’s inquiry was the “biggest, most thorough look at supermarket competition in over 15 years,” and said the work would ensure businesses would be doing the right thing for families and farmers.
“Greater competition is critical for lifting dynamism, productivity and wages growth, putting downward pressure on prices and delivering more choice for Australians dealing with cost-of-living pressures,” he said.
