A Senate committee whose members include The Nationals' Ross Cadel has called for laws banning price gouging in supermarkets, and for the creation of divestiture laws.
In December last year the Senate resolved that the Select Committee on Supermarket Prices be established to inquire into and report on the price setting practices and market power of major supermarkets.
The Select Committee, in its final report released this week, has made 14 recommendations.
The committee recommends the Australian Government amend the Competition and Consumer Act 2010 to create divestiture powers specific to the supermarket sector, where a supermarket has been found to have misused their market power under section 46 of the Act, or engaged in unconscionable conduct.
The committee recommends the government progress legislative amendments to section 46 of the Competition and Consumer Act 2010 to prohibit the charging of excess prices (otherwise known as price gouging).
The committee recommends, as a matter of priority, the government establish a Commission on Prices and Competition to examine prices and price setting practices of industries across the economy, and review government and other restrictions on effective competition which are leading to high prices. In relation to supermarkets, the commission should be provided with the authority to:
• monitor and investigate supermarket prices and price setting practices, including prices along the supply chain (including the farmgate, wholesale and retail price), mark-ups and profits.
• conduct market studies to review restrictions on competition in the supermarket sector.
• require supermarkets to publish historical pricing data that is transparent and accessible to both suppliers and consumers.
• access any data and information required to undertake its work, including supermarket pricing, mark-ups and profits data and price setting policies (both historical and current).
• make referrals to the Australian Competition and Consumer Commission for enforcement; and
• publish reports as required and at least on an annual basis.
The committee has also called for the Food and Grocery Code of Conduct to be made mandatory as soon as possible.
It says this action should be accompanied by "an appropriate regime of financial and other penalties for breaches and protections against supplier retribution."
Senator Cadell said it's become clear that free trade only works for everyone if it is fair trade, and that the power of the big two supermarkets means the sector is no longer fair for consumers and suppliers.
"Divestment is a key Nationals policy position, and, as such, I welcomed the willingness of the committee to consider these powers. These powers only exist for the scenario where a supermarket has been found to have misused their market power or engaged in unconscionable conduct.
"The Albanese government now has three months to respond to the findings. It is time for them to step up to protect growers and shoppers.
"In this time, I'll be continuing to press for a better deal at the farmgate, and a fair go for the consumer. In a cost-of-living crisis, we cannot afford to wait for action from Labor."
The NFF's Horticulture Council has welcomed the release of the report.
Council Chair Jolyon Burnett said while the evidence of price gouging at the checkout has not surprised anyone, there has been shock at the evidence of the widespread appalling treatment of fresh produce suppliers.
"Not only are growers getting a raw deal with every trade, they're also left with little profit to reinvest in the productivity of their businesses. Our partners, including transport operators, are also getting squeezed leaving our food supply chain weak and susceptible to disruption.
"But this report is just part of a growing base of evidence that is painting supermarkets and Bunnings in the same light as the big four banks following the Royal Commission into that industry."
