Chapter 4The relationship between suppliers and supermarkets
4.1Much has been made by the two major supermarkets, Coles Group and Woolworths Group, on their 'commitment to provide value to customers' and their focus on 'helping our customers find ways to spend less on their groceries'.
4.2Those two retailers also claim that these objectives are met through a highly competitive grocery sector where the two major supermarkets 'compete for customers, suppliers and team members' and where being 'price competitive is critical in trying to win our customers' shopping basket'.
4.3Both Coles and Woolworths each told the committee that the ongoing success of their companies relied on using low prices to bring in customers. For example, Ms Leah Weckert, Chief Executive Officer and Managing Director of ColesGroup told the committee:
As a customer-led organisation, our customers expect us to continue to provide a choice of quality products across a range of value propositions to suit their budget and the needs of their household. We are committed to providing this. This is something we remain very focused on, because we know if we don't that customers may have many other alternatives from which to purchase their food and groceries.
4.4Mr Brad Banducci, Chief Executive Officer of Woolworths Group likewise told the committee that:
… we rely on our customers—they're our lifeblood—for us to be successful. If we do not get sales, if we do not generate value for our customers, they don't shop with us for the whole or part of their basket. That is the key for us, and, in the current market we're in, delivering value is critical on a daily basis and a weekly basis to enjoy the privilege of the custom of our customers.
4.5However, many of the suppliers to the supermarkets, particularly fresh food suppliers, argue that the supermarkets do not offer low prices through lowering their own profits. Instead, supermarkets keep their prices low by applying undue pressure on their suppliers to sell their products to supermarkets at lower prices, thereby keeping supermarket profits higher whilst lowering—or completely eliminating—supplier profits. Suppliers argued that supermarkets do this by using their market power to pressure suppliers into unfair trading relationships.
4.6For example, the National Farmers Federation (NFF) submitted that efforts by supermarkets to compete on price could lower prices for consumers, but 'under existing competition legislation, this behaviour has been allowed to occur, meaning that the lower prices through competition come at the expense of prices paid to farmers'.
4.7Ms Amelia Cromb of Grassroots Action Network Tasmania (GRANT) emphasised that food is a human right and compared people's inability to pay high prices for essential items, to the high wastage rates across supermarkets:
… it almost seems like a cruel mockery that everyday people are going to the supermarket to buy food—and food is a human right … People look at them and they can't afford them. At the end of that day, the supermarket can basically rip off the tag of that high price, throw it in the bin as though it just had no value at all. Suddenly, it goes from this high price to nothing. It's criminal. There's no other way to put it.
4.8TasFarmers agreed, submitting that the concentration of the grocery market in Australia 'has significantly influenced the pricing of food and groceries' by granting supermarkets 'substantial corporate power, enabling them to dictate terms to suppliers and impact the overall market dynamics' which ultimately results in consumers bearing the brunt of higher prices for essential items.
4.9This chapter explores the relationship between supermarkets and their suppliers, with a focus on fresh food suppliers and plant nurseries (otherwise known as the greenlife industry). The evidence presented in this chapter demonstrates that the ways supermarkets engage with suppliers are putting Australia's food security at risk, with many suppliers finding it difficult to remain in business. The impact of this is already being felt in the general community, through price increases and lack of choice.
The supermarket-supplier relationship
4.10The two major supermarkets, Coles and Woolworths, made many claims in their evidence to the inquiry about:
the importance they place on ethical and balanced commercial relationships with their suppliers;
how they seek feedback from suppliers; and
how they engage with existing dispute resolution mechanisms.
The actions of buyers
4.11As the Australian Competition and Consumer Commission (ACCC) explains, buyer power can refer to the 'ability of a person to exercise market power in a market in which they are a buyer'. Further, this power is 'typically demonstrated through the ability of a buyer to demand lower prices for goods and services or otherwise influence the terms of supply in its favour'. The ACCC, in its Supermarkets Inquiry Issues Paper, said that it was aware:
… concerns have been raised by suppliers regarding the buyer power of larger supermarkets and wholesalers. A common concern is that larger supermarkets and wholesalers are able to use their buyer power to extract more favourable terms and conditions from suppliers than would otherwise be the case, potentially impacting the sustainability of their operations.
4.12This aligns with what the ACCC found in its 2020 Perishable Agricultural Goods Inquiry. It reported that, 'generally speaking, the more perishable a product is, the weaker the producer's position from which to negotiate favourable terms of supply with the buyers of their goods'.
4.13This weaker negotiation and bargaining position was made clear to the committee by many fresh food suppliers who described their negative engagement with Coles and Woolworths and the aggressive and unconscionable tactics of their buyers and category managers.
4.14But, as Dr Craig Emerson, Independent Reviewer of the Food and Grocery Code of Conduct Review (Grocery Code Review) told the committee, given the focus on prices by the supermarkets, it should not come as a surprise if some supermarket buyers acted poorly towards suppliers:
We hear a lot of evidence that buyers and category managers behave badly. If they are deliberately or inadvertently incentivised to behave badly, they'll behave badly. It's just the way it works.
If, for example, senior management had a very, very laser focus on the margins that each buyer achieved, and created, in some sort of sense, a competition amongst the buyers or at least an awareness that other buyers are doing better because they're getting better margins, what are you going to do as a buyer? You're probably going to start behaving pretty poorly towards your suppliers.
Feedback from suppliers
4.15The major supermarkets explained to the committee the various ways they sought feedback from their suppliers about the behaviour and engagement of their buyers and category managers.
4.16For example, Mr Banducci told the committee about different methods used by Woolworths to seek feedback from suppliers, firstly via an annual survey conducted by Vantage Group which:
… gives us very detailed data on how we are behaving in respect of our suppliers by category. We review that. It is the key input into the modifier or performance bonus adjustment of our category managers. There is a very detailed process that goes on annually. We then supplement that with a bimonthly review, also by that Vantage survey, which drills downs and gives more immediate material. We get that every two months. It has in the order of 500 suppliers who have dealt with us in the last two months that provide feedback to that. We take that very seriously and review that, and it goes back into the feedback and performance for our team. We would like to be at a higher bar than we see on average, and those are two of the mechanics we use to help us assess our progress in that regard.
4.17Woolworths also provided information to the committee that since June 2023, in order to assist smaller suppliers working with large businesses like Woolworths, they 'had a dedicated team in place to support small supplier onboarding and in their first months partnering with us'. Further, Woolworths noted that it recently launched a 'Supplier Commercial Performance Report' for smaller suppliers, due to feedback received as part of the Grocery Code Review. However, Woolworths did not provide details of what that feedback was, or the issue being addressed by this report, making it impossible to assess whether this program appropriately addressed concerns raised.
4.18Ms Weckert of Coles responded to evidence about Coles' supplier engagement, telling the committee:
Claims have been made about how we interact with our suppliers. Weacknowledge that we don't always get it right, but all of our procedures seek to ensure fair and sustainable relationships.
What has been missing in the conversation to date is the many suppliers who choose Coles: suppliers who have been working with Coles for generations—some for more than 50 years … We value our supplier relationships and work hard to interact in a fair, honest and transparent manner.
4.19This evidence was contradicted by suppliers who gave evidence directly to the committee. Mr Michael Crisera of Fruit Growers Victoria said that despite supermarkets claims of happy suppliers, that's not what it hears when it talks to its members, with the same feedback being constantly provided that '"we've talked to our suppliers, and there's no issue." Well, that's not the story we get as an advocacy body for our members'.
4.20In addition, the ACCC provided information on actions it had recently taken against the two large supermarkets:
Coles unconscionable conduct
In 2014 the ACCC took action against Coles Supermarkets Australia Pty Ltd (Coles) for engaging in unconscionable conduct in its dealings with some of its suppliers. The Federal Court made orders by consent that Coles pay $10million in pecuniary penalties and costs. Coles also provided a court enforceable undertaking to the ACCC that it would implement a program that sought to provide redress to over 200 of its suppliers. Coles returned over $12 million to suppliers under this program.
Woolworths Mind the Gap
In December 2015 the ACCC instituted unconscionable conduct proceedings against Woolworths Ltd (Woolworths) in relation to its 'Mind the Gap' scheme. The ACCC alleged that under the scheme, Woolworths systematically sought to obtain payments from over 800 suppliers ranging from $4,291 to $1.4 million to urgently reduce Woolworths' expected significant half year gross profit shortfall. The ACCC further alleged that Woolworths was in a significantly stronger bargaining position than its suppliers and had no pre-existing contractual right to the payments. Woolworths sought over $60 million in payments and ultimately captured over $18 million in payments from suppliers pursuant to this scheme. The Federal Court dismissed the ACCC's case, considering that such action by Woolworths was a normal part of their arrangements with suppliers, and therefore not unconscionable.
4.21Dr Emerson in his role as Independent Reviewer of the Grocery Code told the committee that during his engagement with executives at Coles and Woolworths, they asserted that poor practices with suppliers either don't occur, or 'are very rare'. Dr Emerson noted, however, that the opposite view was held by suppliers and he suggested buyers might have some role in this discrepancy:
When we hear from suppliers, they tell us that [these practices] do occur. I'm not saying that the supermarket CEOs are being untruthful, but it does make me think that it's very important for the top management to know exactly what their buyers and their category managers are doing.
4.22Coles submitted that it was the first supermarket retailer to adopt and independent arbitration process. It told the committee:
If a supplier does have a concern, not only do we have confidential, robust internal mechanisms, but we are bound by the Food and Grocery Code of Conduct, which has alternative complaint mechanisms and is enforced by the ACCC.
4.23Discussion of dispute resolution and arbitration is included at Chapter 7, on improved regulation of the supermarket industry.
Fruit and vegetable producers
4.24By far, most of the evidence the committee received raising concerns about the supplier-supermarket relationships was from fresh food producers, particularly fruit and vegetable farmers. The committee heard from a variety of sources that fruit and vegetable farmers do not believe they have fair business relationships with supermarkets. The committee was told that the negotiations between supermarkets and farmers is uneven due to a range of issues, including:
unenforceable contract terms;
time limited negotiations of perishable products;
data asymmetry on markets prices;
lack of alternative markets;
unrealistic quality expectations;
forced involvement in supermarkets specials; and
retribution resulting from the arbitration and complaints process.
4.25The NFF outlined the 'perfect storm' of conditions for famers that made it challenging for them to negotiate successfully with supermarkets, where farmers are time and cash poor, and lack the resources to engage lawyers and go through court systems to have their contracts reviewed. Farmers also fear retribution should they object to contract terms from a supermarket, which is the farmer's only viable market. The NFF suggested complaints processes needed improvement:
So when we talk about access to justice, it's incredibly important that we ensure that producers have the avenues to challenge unfair aspects of the relationships with the supermarkets or with those intermediaries without the ramifications, without the time or the cost or the barriers, essentially, which makes that a non-viable pathway for them.
4.26The NFF pointed to the ACCC's 2020 Perishable Agricultural Goods Inquiry, which outlined several examples of the misuse of the market concentration by the major supermarkets, including:
Suppliers being asked to disclose commercially sensitive information, which can remove any information advantage they have in the negotiation. This includes providing intellectual property or details of input providers, which is of particular concern when the supermarket also retails a competing private label product.
Pressuring suppliers of perishable agricultural goods to provide supermarkets with some form of offset in exchange for an increase in wholesale prices. This includes paying for promotional activity to an extent that almost negates the price increase.
Retribution for initiating a cost increase discussion, by the de-listing of other products on some occasions.
Using tender processes to procure the supply of chicken meat to increasingly reduce margins to barely viable levels, as supermarkets are able to bargain down prices with reference to price guides that may not be current or are below viability.
Providing a supplier with very little time to negotiate prices in circumstances where their products have a very short shelf life.
4.27The following sections look into each of these concerns in further detail.
Unenforceable 'contracts'
4.28The committee heard from many fruit and vegetable farmers that contract terms with supermarkets are opaque and unenforceable because they generally do not include agreed prices, or volumes. The NFF told the committee:
… there are almost no pre-existing contracts in place. All price and volume is determined literally in the last week before it goes to sale. Again, this is from a negotiation 101 point of view. [The supermarkets] minimise [their] risk by deferring the risk to the grower. The growers bear all of the risk in this process. That's the general principle that we start with.
4.29Woolworths argued that the lack of pre-agreed volumes and pricing 'allows both parties to quickly and flexibly respond to the highly variable nature of fruit and vegetable supply volumes'. Woolworths went on:
We predominantly buy from growers and grower/aggregators with whom we have long-term purchasing relationships. Many of these growers and grower/aggregators are given long-term forecast estimates to provide more certainty on the volumes we are likely to need. We then negotiate specific volumes and pricing with our supply partners each week.
4.30Coles similarly submitted that it has 'seasonal commitments, which are volume based, with agreed quality and volume specifications, ethical requirements, and distribution centre locations as part of these commitments', and where the 'length of these commitments varies based on seasonality and regionality'.
4.31Coles stated that following these commitments:
… both parties then negotiate on a per order basis (with orders typically placed weekly over multiple days). Price is agreed by Coles and the supplier using a variety of factors from current market availability, and volumes needing to be moved within the time period of supply, along with promotional plans for the item.
4.32In contrast, Ms Eve Stocker told the committee that supermarket buyers could amend the price paid to a producer. Ms Stocker noted that 'the agreements are not contracts' and the suppliers held all the risk, saying:
The grower or farmer has no power; the supermarket has all the power in the matter of agreement on price paid to the grower or farmer. The farmer has no alternative if the buyer offers a low price; the farmer can't sell to another market, because there isn't one. The price the farmer is coerced to accept by the buyer may not cover the farmer's costs of producing the product.
4.33AUSVEG presented similar evidence and told the committee of the experience of a grower who recently advised they were told by a retailer:
'We'll renegotiate your contract at the start of June, as long as you take a $300-a-tonne decrease on the product you've been supplying to us for the last 30 years'. And he says, 'Where am I going to go?' They know where he's going to go—out of business.
4.34AUSVEG suggested another key problem for growers was the variance in supply agreement lengths, from three months to a year, and stated this 'makes it exceptionally difficult for growers, who are trying to budget, trying to get loans from the bank, because they can't say what their cash flow is going to be'.
4.35AUSVEG submitted that many of the tactics that supermarkets employ could be considered 'manipulative and unconscionable' and often result in significant additional costs to growers, including growers having to:
… repack, dump or donate cancelled orders; plough in crops grown to retailer estimated supply requirements but where significant volume is not required; dump or donate product that has been questionably rejected; and contend with what is akin to third line forcing across the supply chain.
4.36Melons Australia advised that 'some suppliers operate on verbal agreements, or supply is sourced direct from wholesale markets with no agreement in place'. Where agreements are in place 'they do not specify prices, which are negotiated weekly based on market conditions'.
4.37The committee heard evidence from multiple sources that the buying cycle of perishable fruit and vegetables exacerbated the lack of enforceable contracts.
4.38For example, Fruit Growers Victoria laid out the buying scenario for its members, where buying prices for fruit are 'determined weekly via an online tender process with each of the retailers'. These weekly pricing fluctuations make it difficult for businesses to plan and budget. Fruit Growers Victoria argued that while the tender process 'appears to be a competitive process, unfortunately for suppliers the lowest price becomes the price in this process heavily weighted to the retailers'.
4.39AUSVEG also described a similar buying framework for a large portion of its members, where:
… every week they basically put a price bid in for their product, and it's a bit like a Dutch auction. There might be 20 suppliers of vegetables to a retailer, and on a Monday morning they all put in their volumes and the price and hope that they might get some orders. Or they might get a phone call saying, 'You're a bit expensive; you need to drop this price.'
… There are similar stories of growers saying 'We've had all these input price increases and we can't sell it for that.' It is literally the best offer of the day, and if you don't take the price what you do with your product? We not only have a very short shelf life, but we also have a very short harvest life. Something in a paddock is only eligible to meet those prime specifications for a few days or a week.
4.40The NFF similarly explained the supermarket buying cycle, and the adverse consequences of these processes for farmers:
Firstly, the supermarkets set the buying patterns. It's normally on an extraordinarily compressed buying cycle—12 hours to 24 hours. That's a clear part of your negotiating strategy. The less time you give the growers to make a decision, the fewer options they have in that process.
So, on Monday, growers will be required to go to their computers, go to the supermarkets portal and enter a price and a volume they're willing to provide to the supermarkets for that week … On the Tuesday the supermarkets will contact the growers and they'll either send them an email or a text message or will actually phone them … The communication will go, 'This is what we have determined the price to be. If you want to participate in the market, please acknowledge; go online and accept it. Any variation in price can significantly impact the volumes.' So there are no price negotiations going on. The price is determined and the price is set by the supermarkets.
4.41The NFF advised that for farmers, this buying cycle means they have about six to 12 hours to make a significant commercial decision, noting that their product is perishable, and they have limited alternative markets.
4.42TasFarmers argued for reform in this area, calling for:
… the implementation of transparent contractual agreements between supermarkets and suppliers. These agreements should clearly outline pricing mechanisms, payment terms, and any potential changes, ensuring fairness and predictability for suppliers.
Lack of alternative markets
4.43As outlined above, the committee was told that as the majority of fruit and vegetables are perishable and cannot go to export, farmers are forced to deal with a local market dominated by the two largest supermarkets.
4.44It was also noted that while accessing export markets may be successful for individual farmers, it was not necessarily in the best interests for Australians more broadly to have food exported rather than be available for local consumers.
4.45The NFF noted that if 'you're a grower of any size in this country, you almost have no choice but to deal with the major supermarkets'. It went on to advise that for many farmers, the lack of alternative markets combined with their product being so perishable, means:
Once it's picked, once it's ripe, the clock starts ticking. If it's not sold within a certain time frame, it rots and it becomes worthless. The supermarkets are acutely aware of this issue, and it allows them to offer rock-bottom and, as the ACCC describes it, 'take it or leave it' prices, knowing full well that the growers have almost no choice but to accept the price that's on the table.
4.46Apple and Pear Australia Ltd (APAL) likewise submitted that the perishable nature of the products creates limited selling windows where the seller cannot sit out the market if the price is too low, and supermarkets can leverage this into lower prices.
Data transparency and asymmetry
4.47The committee heard from many sources that data asymmetry was a key driver of the unfair commercial conditions between farmers and supermarkets.In essence, supermarkets have access to a range of price data by virtue of dealing with hundreds of different farmers and wholesalers, while individual farmers only have access to their own price data.
4.48APAL argued that because supermarkets have a combined 65 per cent of market share, they can develop 'detailed insights into national volumes and prices, not only for individual varieties but also for the whole horticulture sector', whereas growers were at a commercial disadvantage as they only had access to their own sales data.
4.49Melons Australia noted that data asymmetry was not restricted to prices, but also to supply volumes:
Supermarket buyers typically provide volume forecasts to growers, but the actual purchase volumes often differ, leading to oversupply and increased price pressure. Supermarkets possess asymmetric data advantage in price negotiations, leaving suppliers with little recourse. This lack of transparency raises concerns about potential market manipulation by supermarkets to drive prices down further.
The alleged practice of overstating forecasted volumes to trigger oversupply and lower prices requires scrutiny, given its potential to distort fresh produce markets. Further investigation is warranted to ensure fairness and market efficiency.
4.50The NFF pointed out that the supermarkets could exploit this data asymmetry in their buying negotiations. The NFF argued for greater transparency to better balance the power asymmetry, saying:
… farmers need to understand how the price they're being paid is determined and with greater oversight and greater data and information about how supermarkets or the intermediaries in that supply chain are determining that price that they're being offered. That then gives the grower more power to be able to understand and make a decision on whether that's the best option for them, and also have more faith in the process and in that negotiation.
4.51AUSVEG noted that sometimes price data will be shared by supermarkets, but only in the context of lowering prices:
… we have a case where one retailer will put a product on special, and even though the other retailer has an agreed price that week with the growers, they'll ring up and say, 'X has got that vegetable on special; we need to price match it, so this is what you need to drop to.' It's constant downward pressure on prices.
4.52Fruit Growers Victoria submitted that supermarkets 'may sometimes deliberately maintain an informational asymmetry for the purpose of extracting surplus margins from the grower' and argued that there was a lack of 'transparency along the supply chain to be able to determine what constitutes price gouging by supermarkets, and what is attributable to cost increases incurred between packing sheds and retail sale'.
4.53Fruit Growers Victoria provided data on mark-up percentages charged by supermarkets for certain fruits (see Figures 4.1 and 4.2 below). Fruit Growers Victoria noted that mark ups for granny smith apples varies between 100percent and 134 per cent, while the buying price to growers was so low that it is often below the cost of production.
4.54AUSVEG also raised concerns around price transparency, noting that while Coles and Woolworths were 'quick to outline that their profit margins are small … what is not clear is the distribution of income/profits across the store categories'. It pointed to industry identified mark-ups of over 300 per cent, leading AUSVEG to suggest that 'given the seasonal variability in pricing, fresh produce appears an ideal category to make significantly better margins than some shelf staple, higher volume products'.
4.55In Woolworths' submission, they themselves pointed to their use of a 'seasonal prices dropped' program to address grocery affordability, but did not outline whether these prices drops were a simple fact of seasonal availability of the relevant produce.
Figure 4.1Coles—mark up percentages for apples and pears from Januaryto December 2023
Source: Fruit Growers Victoria, Submission 5, p. 2.
Figure 4.2Woolworths—mark up percentages for apples and pears from January to December 2023
Source: Fruit Growers Victoria, Submission 5, p. 3.
4.56AUSVEG argued that both growers and the Australian public deserve to know supermarket profits on fruit and vegetables, at a time when growers are facing the threat of leaving the farming industry due to lack of profitability.
4.57Coles told the committee that 'we are listening, and we acknowledge some of the concerns that have been raised by the farming sector, particularly the horticultural sector, around price transparency' and further stated it would be 'very willing to be part of a solution that would involve greater transparency for fresh produce growers'. However, it did not provide any details or suggestions for how it would achieve improved transparency on how the company operates.
4.58The NFF called for producers to have access to the purchasing information, so that:
… they know that they can take their capital away if they want, if they're not engaging in an exchange that allows them to sell for greater than their cost of production—that they're free to do what they want—whereas now we have a marketplace that does not reflect that.
4.59Many of these submitters and witnesses provided suggestions on how this data asymmetry could be addressed. These suggestions are captured later in this report, in Chapter 7.
Quality controls
4.60The committee was told that 'quality controls' on fruit and vegetables were being misused to either control supply, or used as retribution against farmers who complained about supermarkets actions.
4.61As Ms Stocker told the committee:
If a supermarket buyer decides that the harvested fruit or vegetables does not meet the supermarket's standards, they can reject the produce. This means that the grower or farmer does not get any payment for the entire crop, which has cost the farmer a great deal in inputs.
4.62The Victorian Farmers Federation submitted that there were concerns around the transparency of how these quality controls are used by supermarkets to reject produce, meaning a farmer does not know what needs to be done to ensure it doesn't occur again, and there is no independent verification of that quality control. The federation put forward the experiences of its members, who told it that such rejections often occur when the market price has dropped on a specific line of produce and the retailer wants to avoid paying a previously agreed higher price.
4.63AUSVEG argued the use of quality controls to reject produce appeared arbitrary and, combined with the overcalculation of supply volumes leading to crops being destroyed, was driving significant food waste. AUSVEG submitted that 'cosmetic standards have become unnecessarily stringent' with overly‑prescriptive size specifications. AUSVEG pointed to the 2023 Farm to Supermarket Food Waste Report which found that:
… 19 per cent of produce rejected by retailers was given away for free, whilst 19 per cent was thrown away, with farmers losing an estimated 14 million kilograms of fruit and vegetables from rejected deliveries each year.
4.64Woolworths submitted that it was addressing both grocery affordability and food waste arising from quality controls by developing the 'Odd Bunch' brand of fruit and vegetable products, which is produce that does not pass quality control but is still edible, which retail for an average 20 per cent below comparable fruit and vegetable products.
4.65In contrast, AUSVEG submitted that programs like the Odd Bunch were still problematic and didn't assist suppliers:
… these pre-packs often cost more to pack than regular products, still have high specifications so only reduce waste minimally, and are often substituted by the consumer for 'Class 1' products therefore no additional volumes are sold but the returns to growers are less.
Specials and 'loss leader' items
4.66Fruit and vegetable growers told the committee of the practice of 'loss leading' products, whereby supermarkets sell products below cost to draw in customers.
4.67AUSVEG outlined how this practice works:
A loss leader strategy involves selling a product below its cost of production with the intention of enticing customers to visit the store and potentially make additional purchases. Major supermarkets can afford to price a product with no margin because they have other products they can sell for higher profit margins to make up for the loss.
Supermarkets often use vegetables as loss leaders for several reasons; they are essential items in most households, have a high demand, and give the perception of value when first entering the supermarket.
4.68AUSVEG advised that while loss leader practices were not illegal, 'they represent an unfair playing field whereby the strength of negotiation skills and retail practices of buyers leave suppliers in a disadvantaged position'.
4.69Growers and their representative groups expressed concerns that this 'loss leader' strategy was worsening under the current environment of heightened scrutiny of consumer costs, with supermarkets reacting to current public and political focus on their profits by lowering prices—but doing so at the expense of farmers. It was put to the committee that Coles and Woolworths were lowering prices by paying farmers less, not by dropping profit margins:
The greatest concern of every grower at this point in time is that the major supermarkets take the position to say, 'There's a lot of pressure out there. We're just going to reduce all of our prices.' And we have seen this. One of the major supermarkets announced last week that they are reducing the price of a whole series of things. I won't name the specific product, but it's a fruit. They said, 'We're going to reduce the price' of the fruit 'from $3.50 down to $2.50'.
From a general PR [public relations] point of view and from the public's point of view, that's great. The supermarkets have read the tea leaves and they're going to take a hit on their margins. What I've just been made aware of in the last couple of days is that supermarket has now written and advised every one of the growers on the mainland that they will be reducing their purchase price down to $1 per kilogram. So one view is saying, 'That's great. We'll do all of the right things,' but, 'Growers, you are going to fund this.'
4.70A grocery supplier made similar allegations for their industry, that during 'discussions with a senior commercial team member at the retailer, it was explicitly stated that their CEO has mandated an emphasis on all promotional price points, in response to media pressure'. The supplier further submitted that suppliers must maintain the gross margins Woolworths during price promotions, as Woolworths 'will not fund any temporary price reduction from their own pocket, [price drops] must be funded fully by the supplier'.
Impact on competition
4.71The Australian Meat Industry Council (AMIC) noted that while taking a 'loss leader' approach impacts the suppliers required to provide items at a significant discount, it can also negatively impact competitors. The Council pointed to local butchers as an example:
It is up to the supermarkets to explain how they make retail price decisions, but if the recent discounts in the meat cabinet have been in response to media and public pressure, and not market forces, this will pose a fundamental challenge to the business model of the independent local butcher. This is not a criticism of the supermarkets but rather a caution of the unintended consequences of when markets and competition cease being central to decision making.
… Butchers must not become collateral damage from the supermarkets discounting their meat category as loss leaders in response to sustained public and political pressure.
4.72AMIC further observed that 'while livestock markets have rallied in 2024, the supermarkets have again discounted their meat categories amidst much fanfare'. AMIC said that for butchers:
… this means additional pressure to their cost base and more competition to maintain sales, pressures which were identified in our survey. While half of butchers indicated they thought trading conditions would more or less stay the same in 2024, 41% responded that it would be worse and only 7%thought it would improve.
The role of promotions
4.73In responding to concerns about high grocery prices for customers, the Coles submission pointed to its weekly specials and promotions as a way the supermarket helps 'lower the cost of living for Australian households'. Coles submitted that it provides 'thousands of weekly specials offering short term discounts' of up to half price on 'high volume lines critical to the customer basket' including dairy, fruit and vegetables, meat and seafood. Coles also provided details on its seasonal promotions, such as having lowered the price of Christmas hams to the lowest price in four years.
4.74Coles informed the committee that the 'big specials' providing 40 to 50 per cent off, 'would be the ones where it would be most common to find that they are co‑funded by both Coles and the supplier'. Coles argued that:
Part of the reason for that is they are the ones that drive the big volume, and so it's about sharing risk appropriately between the two parties and not putting that risk just in one place.
4.75However, Coles did not specify the proportion of cost-bearing between it and its suppliers, remaining silent on the question of who in the supply chain was ultimately paying the cost of that low price to consumers.
4.76Mr Mitchell McNab of Fruit Growers Victoria however, said that from his understanding, such promotions 'are typically funded by a lower price paid at the farm gate'.
4.77Notably however, Mr Banducci did agree that lower prices for customers did mean, at least in part, lower prices to their suppliers, telling the committee:
… what our customers want to see are prices come down, and we need to work with our suppliers, mainly in long-life categories, to deliver that at the shelf edge.
4.78Mr Abdel Badoura spoke to his insider knowledge of supermarket pricing practices, and submitted that for grocery items, promotions were either partly or fully funded by suppliers in advance, with failure to agree resulting in the items no longer being stocked by the supermarket. Mr Badoura noted that the two major retailers took different approaches: 'Woolworths has strict rules around promotional funding/allowance where they need to maintain their base margin, regardless of the promotion', whereas 'Coles on the other hand will contribute towards deeper promotions and drive '50% off' promotions throughout their stores'.
Cost recovery and the viability of farming
4.79Many fruit and vegetable growers are reporting that the downward pressure on prices caused by the various issues outlined above, has resulted in a market where they are not recovering their growing costs from the sales of their produce, leading their farms to become economically unsustainable.
4.80For example, TasFarmers submitted that it remains highly concerned with the widening gap between farmgate prices and supermarket prices which 'threatens the economic viability of the agricultural sector'. Another submitter contended that profits 'of major supermarket chains like Coles and Woolworths have been rising, while farm profits have been declining'.
4.81The committee was told by the NFF that many farmers have not received price increases for many years. AUSVEG similarly advised that 'many growers are under increasing pressure from supermarkets to accept lower and lower prices, with many receiving the same price they were receiving five, 10 or even more years ago'.
4.82Melons Australia similarly told the committee that external factors have worsened existing market deficiencies, making it challenging for growers to cover rising production costs; for example, 'freight and transport costs have increased 35% on average for our Australian melon growers over the past 3years alone'.
4.83Fruit Growers Victoria also advised that it was 'concerned that abuse of market power and unfair buying terms is making fruit growing uneconomic, with our members reporting being forced to sell fruit below the cost of production'.
4.84These claims appear to be supported by the following information provided by the Australian Bureau of Statistics:
Over the last four years, the largest price increase has been recorded for Dairy and related products (+26.7%) and Bread and cereal products (+24.0%). The smallest increase over the last four years was recorded for Fruit and vegetables (+12.0%) and Meat and seafoods (+15.2%). Looking at price change over the 12 months to the December 2023 quarter, price increases have been highest for Bread and cereal products (+8.2%) and Food products n.e.c (not elsewhere classified) (+6.5%). Price change has been flat (0.0%) for Meat and seafoods and fell 0.2% for Fruit and vegetables.
4.85Mr George Mills, a farmer from Tasmania, told the committee that farmers take on huge risks and often do not recover their costs:
With the changing climate, heat stress, snap cold events and so on, the products that we produce are going to vary. But, at the moment, farmers are taking the whole cost of that on our shoulders. No-one else is in the community. The businesses that buy our products don't. The people who buy the products from those businesses don't. We are accepting the whole lot, and we can't afford to do it. We're going to go broke. We're going to go out.
4.86Coles also recognised that 'natural disasters and seasonal variations sometimes create an unpredictable environment for farmers, supermarkets, and consumers' but did not provide any information on how such occurrences impact their profits. The evidence from farmers to the inquiry, outlined in this chapter, suggests that wherever there are such occurrences, the costs are borne by the farmers, with supermarkets retaining their profit margins at all times.
4.87Dr Emerson remarked that many suppliers were not being paid enough to keep investing in new technologies, which itself would eventually drive up prices. DrEmerson told the committee: 'I think it's an unsatisfactory situation where many are on such tight margins that they're not necessarily closing tomorrow, they've got enough just to survive, but definitely not enough to invest in those sorts of technologies to improve quality and reduce price'.
Complaints and retribution
4.88The committee was told from many sources that farmers fear retribution if they complain or do not agree to supermarkets' contract terms. For instance, MrMitchell McNab of Fruit Growers Victoria said that 'if anyone is to come forward with an issue in negotiation processes, well, typically there is a flow-on effect in that supply arrangement going forward between that supplier and the retailer'.
4.89The NFF told the committee that 'commercial retribution is a very real fact'. The NFF said that farmers worry that if they voice concerns and:
… if they do not participate during the buy cycle, they will be punished. They'll get lower orders going forward, and they cannot commercially afford to do that. At this stage every grower in this country feels they have almost no choice but to accept the price that is put on the table. It's a very tilted playing field. This has had profound impacts for the entire sector.
4.90AUSVEG reported that growers fear commercial retribution for raising issues directly with a retailer, or any of the external complaints mechanisms, and reported that 'challenging unfair trading terms exposes individual growers to commercial retribution through various actions such as punitive treatment, reduced orders, or cancelled future contracts'.
4.91Mrs Anna Barker, from The Treasury Food and Grocery Code of Conduct Review, told the committee that the Grocery Code Review was finding suppliers reluctant to engage with it, due to fear of retribution:
Some advocates of the voluntary code argue that there've been very few disputes and therefore the code must be working well. My argument is that it's evidence of the fear of retribution and that the code is not working well. … We had a lot of evidence that suppliers are in the slightly invidious position where they're so fearful of retribution that they don't want to go on the record for the purposes of the review.
4.92Dr Emerson, Independent Reviewer of the Code Review agreed, also telling the committee about the possible repercussions of suppliers speaking out:
… the category manager and/or the buyers—probably it would be at the category manager level where they oversee the buyers—might say, 'Okay, we will move your product to a less favourable part of the supermarket.' Ifyou've got eyeline, they tend to be the premium positions. Maybe down the bottom, down at the end of the aisle, not so much. That's a move away from a prime spot to a much inferior spot. And indeed there's just delisting altogether.
Now, they, as a supermarket buyer or a category manager, don't have to say, 'We are delisting you because you behaved badly,' or, 'You were rough with us.' They just fear being delisted. Again, it comes back to that very large imbalance in the market power between the two.
4.93TasFarmers recommended the creation of:
… an independent Supplier Ombudsman to mediate disputes and ensure fair dealings between suppliers and major supermarkets. This third-party entity can investigate complaints, resolve issues, and provide a neutral platform for dispute resolution, promoting a balanced power dynamic.
Food security
4.94The issue of food security was discussed by many inquiry participants, from an individual level where people are unable to afford basic food staples, as well as from a national perspective in that much of farming itself is becoming uneconomically viable, threatening the rates of food production within Australia.
4.95The Global Centre for Preventive Health and Nutrition (GLOBE) raised concerns around the impact that supermarket pricing has on the viability of the farming sector, and the flow-on effects this has for the Australian public:
… supermarket concentration threatens the viability of [the agricultural] sector, particularly for independent and small farmers – who are key for ensuring biodiversity. Supermarkets have the power to negotiate poor prices to farmers, threatening their livelihoods and undermining the nutrient content of food, the type of food produced, the level of food waste, and the responsible use of production resources such as water.
4.96The committee heard that many farmers were either forcibly or voluntarily leaving the industry, and that extreme prices pressures was impacting on the mental health of farmers.
4.97Mr Jeremy Griffith of the NFF Horticulture Council told the committee that in the last year, farmers had bulldozed around 15 per cent of the entire Australian pear crop and expressed his concerns about this, saying 'We as a country are looking at our ability to be able to grow our own food. Our view is that we should not be held to ransom by a large corporate duopoly'.
4.98Mr Griffith emphasised the impact this has on the national interest and food security:
If we still keep seeing farmers literally walking away and vegetable growers literally giving up the industry and the rest of it, we're going to see a reduction in supply. There are two ways you can deal with that. You can start to import. I don't necessarily think that's in our national interest. I think most countries would expect food security and the ability to feed yourself as a fundamental level 1 Maslow non-negotiable.
4.99Mr Joe Bradley of eastAUSmilk told the committee:
I'm not in a position to get into how supermarkets should run their business, but one of the things I do know is that we have to ensure that this country always has food, and it's fast getting to the stage where food is coming in from overseas more and more.
4.100AUSVEG further submitted that 77 per cent of farmers in the ACT have experienced thoughts of self-harm or suicide—the highest of all the states and territories. It pointed to responses to its surveys indicating that many farmers were considering leaving the agricultural sector:
In June last year [2023] 34 per cent of vegetable growers in an AUSVEG industry sentiment survey indicated they were considering leaving the industry next year. In early 2024, about a month ago, a repeat of that survey revealed that that figure had increased to 37 percent. Input cost increases, poor retail pricing, and labour costs were the top three factors informing those considerations. Positive change is needed to stop more and more growers leaving the industry, which will just result in price increases for consumers.
4.101Ms Amy Booth of GRANT pointed to the need to look at the issue from a food systems perspective:
… we need to really have a big think about an overhaul of how our food systems are operating. If, from the farm to the plate, there are all of these middle players where all this waste is happening and all of these business practices aren't working the right way, then something needs to happen very systemically … the reality is that these are essential items, and getting food is an essential service, so we need to be drastically talking about how these items need to be in the store for longer and how people have access to them for longer.
Meat and dairy suppliers
4.102While facing slightly different concerns to the horticulture sector, the beef and dairy industries also gave evidence to the committee about issues in the supermarket supply chain—including a lack of transparency and fear of retribution.
Beef and pork
4.103Cattle Australia, representing Australia's grass-fed cattle producers, said there has long been a frustration in the sector over the lack of 'transparency in price setting at the retail level'. Cattle Australia noted the 2020 ACCC inquiry into bargaining power imbalances in supply chains for perishable agricultural products found 'a lack of transparency in relation to price and non-price factors and some beef producers have little transparency over the carcase grading process which can generate a lack of trust in the prices received' and further, 'that producers who raise concerns with a processor sometimes had their contract terminated or volumes reduced'.
4.104Perhaps reflecting the very different contracting and buying arrangements between beef suppliers and produce suppliers to supermarkets, the inquiry received multiple submissions from beef farmers stating they were satisfied with their supply relationships with supermarkets.
4.105 Likewise, Australian Pork Limited, the peak national representative body for Australian pork producers, submitted that 'commercial arrangements in the Australian pork industry appear to be reasonably balanced and considered, especially when considering larger trading agreements' and this is 'largely due to these larger agreements being struck between sophisticated buyers and sellers'.
4.106Argus, a commodities markets price reporting company, publishes a weekly price for Australian frozen boxed beef export markets every Friday. Argus submitted that its price index contributes to price transparency that is 'well supported by those in the beef supply chain from farmer to feedlot to processor to exporter', but also noted that 'supermarkets (Coles and Woolworths) have been reluctant to engage with us fully, but this is a work in progress'.
4.107While the vegetable sector has pointed to the beef market as having better price transparency, Cattle Australia did observe that the ACCC inquiry 'found that producers were unable to compare prices across sales channels which hindered their ability to make farm production decisions or determine their best marketing options', and that cattle sales 'were reported inconsistently and price grids used by processors to indicate prices for specific carcase attributes varied in format and complexity'.
Dairy
4.108eastAUSmilk, an industry body representing dairy farmers in New South Wales and Queensland, noted that while its members sell directly to milk processors and do not deal directly with supermarkets, the milk processors on-sell their milk to supermarkets. eastAUSmilk noted that its members:
… have frequent contact with milk processor companies at the local level and upwards.
Every last one of those processors has horror stories to tell about being bullied by supermarkets, but they will not tell those stories. They tell our members, who tell us, but processors will not speak up.
They know that if they are identified as the source of a negative story about a major supermarket, there are a myriad of ways, small and large, their business will be made to suffer.
4.109To counter this fear of retribution, eastAUSmilk supported the Food and Grocery Code of Conduct being made mandatory.
4.110Similar to the evidence received from fruit and vegetable farmers, eastAUSmilk reported that many dairy farmers are leaving the industry, adding to food insecurity in Australia:
Dairy farmers are leaving in droves. As a good friend of mine said recently, 'There are easier ways to lose money than being a dairy farmer.' And they are just going out in droves. Every day farmers leave this industry. I can tell you, when they leave this industry, they don't come back. You don't come back to the seven-days-a-week, 365-days-a-year slog that dairy farming is. You just don't come back. We're losing it.
4.111Woolworths submitted that Australian dairy prices are influenced by global export prices and submitted a graph of prices (included at Figure 4.3) which it argued showed 'annual milk farmgate pricing remains elevated, driven by strong competition between milk processors to secure supply'. However, this data also shows that despite claiming dairy prices are influenced by global export prices, which fluctuate greatly, Australian prices remain almost entirely static, indicating strong market controls on milk prices in Australia.
Figure 4.3Global farmgate milk prices, AUD/litre, Jul 2021 –Nov 2023
Source: Australian Dairy Products Federation, Milk Values in Other Markets quoted in Woolworths, Submission23, p. 11.
Plant nurseries
4.112The committee was told of the situation for plant nursery growers, who produce plants, trees and seedlings for sale in supermarkets and 'big box' stores such as Bunnings and IKEA—referred to as the greenlife industry. The committee heard that although such plants are classified as groceries in the Food and Grocery Code of Conduct, as the 'big box' stores are not signatory to that Code, many plant nursery sales were not protected.
4.113Greenlife Industry Australia (Greenlife), the peak body representing supplier nurseries, submitted that 'Nursery growers experience similar trading inequities as those supplying supermarkets and yet are not protected by any code of practice regulating behaviour'.
4.114Ms Karen Brock, a nursery grower, told the committee that their industry is very similar to fruit and vegetable growers, and they experience the same supplier‑buyer difficulties:
We are dealing with a perishable product. It has a shelf time, it has a season and it has significant investments with technology, infrastructure, vehicles, human resources and land. We are farmers on a small footprint. We are dealing with the exact same situations as you have probably heard about across the agriculture sector.
4.115Greenlife noted that Bunnings has a market share of 70 per cent, rising to 80percent in some regions, and in 2023 reported a revenue increase of 4.4percent to $18.5 billion. Further, by volume of units sold, plants are second in sales only to tins of paint.
4.116Greenlife submitted that in the 'absence of meaningful competitors … big box retailers are able to dictate terms of trade, set the prices and control the supply of nursery products in the retail supply chain'. Ms Johanna Cave, ChiefExecutive Officer of Greenlife Industry Australia told the committee that:
… because Bunnings has become a lot more powerful and they are outside any system of regulation so there are no checks whatsoever on how they exercise that power … Growers have zero power in the relationship, and even significant, large-scale, highly technological, advanced growers that operate nationally are on their knees in front of the big-box retailers.
4.117Similar to the perishable nature of fruit and vegetables, Greenlife observed that nursery plants have virtually no export markets, so growers often have little alternative market than to deal with the largest domestic plants buyer—Bunnings. Mr Griffith of the NFF agreed with Greenlife, suggesting that whatever 'issues the fruit and vegetable sector faces [in dealing with supermarkets], the plant nurseries face exactly the same issues in dealing with Bunnings'.
4.118Greenlife advised the committee of other similar trading practices experienced in greenlife industries as by the horticulture industry. Nursery growers faced asymmetry of price information, which 'often encourages a "take it or leave it" attitude on the part of big box retailers and without alternative markets for the products, growers typically take the price – even if it means selling at a loss'.
4.119The committee was told that nursery growers also face the same lack of contract conditions, without enforceable terms such as volumes, and with contracts often 'limiting their buying commitment to one single plant or requiring growers to re-tender (at short notice) to become a preferred supplier'. Again, like reports from farmers, this requires nursery growers to bear all the risks of investing in their business in the hope—but not expectation—that the products will be sold.
4.120Mr Peter Smith, a nursery grower, told the committee of being encouraged to invest $4.5 million to grow his business, but without 'any orders or any firm confirmation about what would be taken as we were growing', those orders 'quickly started to dwindle and we are left with a facility that's not utilised'.
4.121It was put to the committee that nursery growers also experience the same 'specials' tactics, where the retailer asks the grower to participate in specials and sell at or below cost of production 'to demonstrate they are a "team player" with the implication that if they don't agree, they will be excluded from the team'.
4.122Ms Brock described her engagement with Bunnings as feeling like 'slaves to Bunnings', where her business was 'like a mouse running around the hamster wheel, and no matter how fast you spun that wheel you couldn't ever achieve the goal of making somebody happy in that environment'.
4.123Ms Brock confirmed that nursery growers also fear retribution from larger buyers, in this case Bunnings:
Fear of retribution amongst the growers is real. With the mechanisms to create emails, listing meeting notes that are not a true record, targeting your top lines by raising their retail prices so that the sales slow down or suddenly there are specials that have to be displayed in the store taking up some space that your plants usually reside in, blocking your sales—and the list goes on—they have the means of penalising and controlling your sales.
4.124Bunnings refuted most of the assertions made by Greenlife and the nursery witnesses, submitting that it has less than 25 per cent of Australian nursery sales, that it operates 'within a comprehensive regulatory framework' overseen by the ACCC, and that 'claims our supplier agreements are not legally enforceable contracts are incorrect'.
4.125However, Bunnings' submission does not specifically refute the claim from Greenlife that some of its contracts are drafted with only one plant as the volume, essentially rendering the enforceable portion of the contract meaningless for recoverable funds. Instead, Bunnings noted that there are 'written commitments' to volume and that Bunnings is 'flexible on volume' in response to 'unplanned issues for its greenlife growers'.
4.126Greenlife recommended that:
big box retailers be included in the Food and Grocery Code of Conduct;
that the code become mandatory;
that an independent arbiter oversee complaints; and
that the ACCC is appropriately funded to initiate inquiries into these trading relationships.
4.127Bunnings, however, submitted that it should not be included in the Grocery Code, largely because of the broad range of other products and services of Bunnings that are not relevant to the Code and fall outside the scope of food and groceries.
Goods suppliers
4.128The committee received evidence that not only fresh food producers and suppliers, but goods suppliers are facing pricing pressures from supermarkets, and negotiating environments where supermarkets use their market power for unfair trading relationships.
4.129Mr Abdel Badoura, who had spent over a decade working with grocery suppliers to supermarkets, submitted that supermarkets:
undertake unethical dealings when bringing on new suppliers, enabled by the lack of competition in the market and their abuse of market power;
engage in aggressive price increase negotiations and tactics to increase their profits; and that
this misuse of market power by the supermarkets results in substantially lessened competition.
4.130Mr Badoura outlined the terms that manufacturers must meet to supply Coles and Woolworths, including the discounts to be given off the list price for all items and advance agreement on the 'specials' discounts to be provided periodically. His submission provided copies of emails outlining that Coles' 'margin expectation went from 39.5% to 45% in the span of six months' and that 'failure to meet these margins means that Coles will not range the company's products'. Mr Badoura further argued that the emails show that Coles expects those margins to increase 'year on year to enhance profits'.
4.131Further, Mr Badoura's evidence suggested that suppliers must also agree to use the Coles and Woolworths advertising catalogues, which can be 'over half a million dollars per annum advertising support'.
4.132Mr Badoura provided an example of an Australian start up business which attempted to get its products sold in Coles and Woolworths:
the product costs $8.45 to manufacture and ship into Australia, not including supplier's operational cost (warehousing, hiring, salaries, rent, marketing, etc.)
the list price for this product is $15.91 which means the supplier is making 46.8% profit margin or $7.46 per unit
the retailer has stipulated that the everyday discount is 20 per cent. Their buying price becomes $12.73, a discount of $3.18. The supplier went from making $7.46 down to $4.28 (33.61 per cent)
the category margin is set at 50 per cent by the retailer. The choice for the supplier is then to either set the recommended retailer price at $28 (or higher) or eat into the $4.28 profit that is then used to pay rent, salaries, marketing, etc.
additionally, the retailer dictates that this supplier will need to run '50% Off' promos (as is the category norm). The retailer has stipulated that they want to maintain their profit margin at 50 per cent. During these promotions, supermarkets are making $6.37 per unit sold which is funded by the supplier. As a result, the supplier loses $2.09 for every unit sold on promotion.
4.133Not only that, Mr Badoura outlined the additional costs to the supplier imposed by the supermarkets:
Freight charges to move products from one Distribution Centre (DC) to another: supplier sends stock to one main DC, then the retailers charge the supplier to distribute to other DCs
Store markdowns: when a product is about to expire, customers will see a sticker with a markdown. It is within each store manager's discretion to make markdowns, which supplier pays for
Clearance: if a product is not performing, it might get deleted and will be discounted to clear space for another product
Loyalty program promotions: loyalty program offers are paid for by the supplier. When you redeem at the store, the supplier gets charged the redemption.
4.134Mr Badoura summarised the above processes by providing a powerful statement on how the major supermarket retailers are operating:
These are the elements of the market power abuse, which then essentially forces the suppliers to agree or to provide higher recommended prices, which you would not see in other countries with the same product. That's essentially the cost of doing business in Australia with these two players, because there is essentially no difference between Coles and Woolworths when you're dealing with them. Their operations seem identical. Their margin asks, weirdly enough, are identical. Their rate cards on certain things are also identical. It puts a lot of financial strain on businesses, which are then forced to increase prices over time.
4.135To address these issues, Mr Badoura recommended, among other things:
increasing the responsibility and funding of the ACCC where they are responsible for overseeing price increases to validate what is price gouging and what is legitimate;
a review of the Grocery Code of Conduct, working with both sides of the pendulum and passing it into law;
introducing penalties for price gouging with an unlimited cap on the penalty, thus leaving it for the regulator/tribunal to decide;
margin control to bring prices down in the short term and alleviate the financial pressure currently being felt across the country; and
divesture legislation to enable the government to act similar to the United States and the United Kingdom.
4.136Many of the inquiry participants have recommended a range of actions that could be taken to strengthen competition and address unfair supermarket practices that impact consumers, suppliers and other smaller competitors. These are discussed in greater detail in Chapter 7.