Chapter 9Committee views and recommendations
9.1Australia is in the midst of a cost of living crisis, and yet the supermarkets—and especially the Coles and Woolworths duopoly—are making record profits.
9.2Consumers are bearing the brunt of increases in food and grocery prices, and domestic small agricultural suppliers and businesses are being squeezed to constantly provide more for less, risking their livelihoods and those of the people around them. They risk even more if they dare to speak out and question the way this duopoly deals with its suppliers.
9.3The evidence to this committee from shoppers, consumers, farmers and other suppliers, supermarket employees and even smaller supermarket competitors has shown that reform of the supermarket sector is needed. Thesupermarket duopoly in this country is operating without proper oversight and restraint, thanks to outdated and ineffectual consumer and competition law.
9.4The committee received many submissions from people struggling to make ends meet, struggling to feed their families and to buy the most basicnecessities of life. We heard from welfare organisations and directly from individuals about the toll this takes on their lives. While there are many causes of the current cost of living pressures, supermarket prices are certainly contributing. That they are faced with choices of buying food or seeing the doctor; skipping meals; going without healthy food in favour of cheaper unhealthy foods. We heard about people who have resorted to dumpster-diving to rescue discarded groceries in order to eat.
9.5This is not okay in a wealthy nation like Australia.
9.6The committee heard from some farmers and other suppliers who struggle to make ends meet when they haven't been given a price increase in 15 years. We heard that farmers fear retribution for trying to negotiate on a level playing field. Thecommittee heard again and again of the numbers of smaller farmers who are leaving the industry, saying 'there are easier ways to lose money'. Not only does this impact those individual farming families, but it also puts Australia's food security at risk.
9.7This is not okay in a wealthy nation like Australia.
9.8The evidence before the committee suggests that an overhaul of the supermarket sector and a competition policy is needed.
9.9To that end, this chapter lays out the committee's views on how such reform should progress, through:
divestiture powers, to reduce the market share of supermarkets, where a supermarket retailer has been found to have misused their market power or engaged in unconscionable conduct;
prohibiting the charging of excess prices;
creation of a new Commission on Prices and Competition with appropriate powers of oversight, investigation and referral to the Australian Competition and Consumer Commission (ACCC);
giving the ACCC new and improved powers to investigate and enforce unfair trading practices and pricing, the Unit Pricing Code, merger reforms and other competition and consumer laws;
making the Food and Grocery Code of Conduct mandatory, and including the greenlife industry in the code;
reforms to the Unit Pricing Code to introduce mandatory labelling standards and to help consumers identify and understand 'shrinkflation' and promotional material; and
strengthening the National Food Waste Strategy.
Engagement with the committee
9.10Before moving to recommendations, the committee wishes to extend its thanks to the many correspondents who came forward with stories about the often‑inexplicable pricing practices seen in supermarkets and the further impact this has had on their lives in a cost of living crisis while they are trying to make ends meet.
9.11The committee is especially grateful to those who took on the role of whistleblower, speaking frankly to the committee—both publicly and privately—about how Coles and Woolworths treat and engage with their farmers and suppliers, and how they set food and grocery prices. Your evidence was invaluable in helping the committee develop its views and recommendations, and the committee acknowledges the courage it took for you to share your experiences.
9.12Notwithstanding the evidence put to this committee about the behaviour of supermarkets towards both consumers and suppliers, the committee acknowledges that the major supermarkets and most other key inquiry participants engaged cooperatively with the committee where possible, which the committee appreciates.
Mr Brad Banducci
9.13However, one area where the committee did not enjoy productive engagement with the major chains was during the public hearing appearance of the Chief Executive Officer of Woolworths, Mr Brad Banducci.
9.14Mr Banducci persistently refused to provide the committee with Woolworths' most recent return on equity (ROE) result, despite being asked to do so many times by multiple senators. It remained open to Mr Banducci to provide the ROE figure as requested, and then inform the committee about how Woolworths does or does not consider such a metric as relevant to the measure of success of its business.
9.15The committee can only surmise that in failing to provide the ROE, Mr Banducci knew full well that the ROE figure would not reflect well on his company during a cost of living crisis and during intense public scrutiny—to the point where the committee had to explain to Mr Banducci the significant personal penalties which the Senate could impose if a witness is found to be in contempt of the Senate.
9.16Penalties for contempt can include financial penalties, or up to six months jail time. The committee takes this opportunity to reiterate that any such penalties would be a matter for the Senate as a whole to consider and determine—committees themselves have not been delegated such powers by the Senate. Committees can, however, make recommendations to the Senate that it investigate matters further, in order to determine if contempt has occurred.
9.17Woolworths later provided its 2023 ROE to the committee on notice. The committee is therefore not minded to pursue the matter. However, the committee reminds all those engaging with the Senate about the powers of committees to compel the production of documents, the answering of questions and the appearance of witnesses.
9.18Other companies, like Bunnings, were also not forthcoming with the committee and its requests for evidence. The committee was disappointed that the Bunnings Chief Executive Officer did not appear personally to give evidence. The committee also sought to hear from a range of multinational companies, to seek their explanations as to their roles in food and grocery price setting. As laid out later in this chapter, the committee considered the engagement of these companies to be unsatisfactory.
Divestiture powers
9.19It is a well-accepted proposition that market concentration impedes competition, reduces productivity growth, slows innovation, and is a massive drain on the economy as a whole. It is another well-accepted proposition that competition stimulates economic activity, and sometimes the market requires intervention in order to ensure that competition is set at an appropriate level.
9.20There was considerable support put forward during the inquiry for Australia's competition and consumer laws to be supported by expanded powers of divestiture. While noting that some participants did not agree that divestiture powers were the best approach, a clear majority of inquiry participants advised that divestiture powers would be an important 'final step' in competition regulation, to be drawn upon when all else fails.
9.21The committee was also told that having divestiture powers in the face of proven abuses of market power would have a 'big stick' impact of ensuring that supermarkets take regulation more seriously. Divestiture would be a valuable final option in the arsenal available to government to ensure that supermarket economic activity remains on an appropriately level playing field, to the benefit of all within the Australian economy.
9.22The Competition and Consumer Amendment (Divestiture Powers) Bill 2024, subject to inquiry by this committee and currently before the Senate, would implement a divestiture remedy for addressing abuses of market power, and it received considerable support during the committee's inquiry into the bill. However, the powers being enacted in the bill would be economy-wide powers rather than focused on the issue before the committee, being supermarkets. The committee could not reach agreement on the bill.
9.23The committee did agree to divestiture powers being enacted, if directed specifically at the supermarket sector.
9.24The 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.
Price gouging
9.25The question of whether price gouging exists in the supermarket sector was at the heart of this inquiry. Chapter Seven outlined that price gouging refers to sudden and seemingly unjustified increases in prices, and how this manifests in Australia was outlined in detail in chapters three and four. The answer seems to be resounding yes, with it occurring in many and varied ways. While many of those ways appear minor on the surface—a dollar here, a fraction of a percentage there—they add up incrementally. Taken as a whole, those individual activities create a picture of an industry driven by profits at the expense of consumers, who have a right to affordable and nutritious food.
9.26There were many calls from consumers and suppliers alike, to enact stronger protections specifically against price gouging, while improving transparency around price-setting practices and ensuring adequate enforcement mechanisms.
9.27The committee heard from the supermarkets and their advocate organisations, that price gouging does not exist. The question remains: if there is no price gouging, then such legislation is not to be feared, as the prohibitions would not be triggered.
9.28However, the evidence brought forward by people willing to speak out about the business practices of Coles and Woolworths suggests that maintaining margins and increasing margin growth is occurring at the expense of suppliers, consumers, and best business practices, and without proper justification.
9.29The committee therefore recommends that section 46 of the Competition and Consumer Act 2010 be amended to make it an offence to charge excessive prices, in terms similar to the European Union provisions. Consideration should also be given to the reinstatement of GST (Goods and Services Tax) pricing legislation of 2000 to 2003, regarding the naming of businesses and industries that overcharge.
9.30The committee recommends that the Australian 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).
Pricing commission
9.31Many expert witnesses recommended a new commission be established to review the competition environment and the impact of that environment on supplier and consumer prices.
9.32The committee supports these views and considers that such a commission would work in collaboration with the ACCC, where high‑level breaches of regulation would be referred to the ACCC for investigation and prosecution.
9.33However, a commission could work more holistically on competition issues and have a more detailed pricing oversight function than would be appropriate for the ACCC, including requiring data transparency from supermarkets and publishing regular reports on pricing trends.
9.34The committee agrees with these expert recommendations, and is of the view that a new Commission on Prices and Competition (Pricing Commission) should be established 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 ACCC for enforcement; and
publish reports as required and at least on an annual basis.
9.35The Pricing Commission should have access to any data it requires from the supermarket retailers and publish regular reports on the data, including but not limited to farmgate, wholesale and retail prices, input costs and trends in supermarket pricing, profits and mark ups.
9.36The Pricing Commission should require all major supermarkets to publish historical grocery pricing information to increase transparency and allow consumers to track price changes over time.
9.37The Pricing Commission should also review potential reforms that would:
enforce supermarkets to publish the cost of produce available for both small and large format stores online where there is a price difference; and
prevent supermarket practices of:
multi-buy discounts that aim to increase consumer spending;
use of app-only discounts on essentials; and
member-only pricing.
9.38The committee recommends that, as a matter of priority, the Australian 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.
Unfair trading relationships
9.39The committee heard story after story about the power imbalances that supermarkets exert over their suppliers to bring down the wholesale prices of groceries and fresh foods. The same stories were told from different people, in different regions and across different sectors and industries. The committee heard the same stories of unfair trading practices arising from supermarket duopoly of Coles and Woolworths.
9.40The committee heard from many small business farming organisations and individual farmers about their supplier relationships and contracts with supermarkets. This evidence was of concern, not only because of what was said, but because witnesses themselves were so fearful of speaking and so thankful that their voices were being heard.
9.41Many of these stories were told to the committee in confidence, or with hidden identities because people were afraid of backlash from supermarkets with whom they had ongoing trading relationships. The committee also heard that many farmers are too scared to speak out and use the existing complaint and arbitration processes under the current Food and Grocery Code.
9.42Once again, the committee heard from the supermarkets and their advocate organisations, that prohibitions on unfair trading practices were not needed. And just as with price gouging, the question remains: if there are no unfair trading practices, then such legislation is not to be feared, as the prohibitions would never be triggered.
9.43In addition, there is now a volume of evidence and support—including from the supermarkets themselves—to make the Grocery Code mandatory. This has now been recommended by people across the political spectrum, including, for example, by Professor Allan Fels in his ACTU report; by Dr Craig Emerson in his interim report for the Food and Grocery Code of Conduct review; and by the House of Representatives Standing Committee on Agriculture (chaired by the Government).
9.44But it was agreed that a mandatory code must be accompanied by financial and other penalties if it was to act as an effective deterrent to the use and abuse of negotiation and market power.
9.45The committee supports the Code being made mandatory and being bolstered by appropriate financial and other penalties. The committee acknowledges that the Dairy Code of Conduct and the Horticulture Code of Conduct are existing, mandatory codes, imposing minimum standards on those industries, with penalty provisions. Making the Food and Grocery Code of Conduct mandatory should not adversely impact existing industry codes, and the committee recommends the Dairy and Horticulture Codes become schedules to the Food and Grocery Code to ensure their seamless intersection.
9.46The committee also notes that The Treasury recently consulted on unfair trading practices and potential gaps in the Australian Consumer Law. Public consultation closed on 29 November 2023. The Government is currently considering the submissions received. The committee encourages The Treasury to consider the evidence put to this committee when formulating its views.
9.47The ACCC recommended the introduction of an economy-wide prohibition on unfair trading practices which would empower the ACCC to address unfair practices in the supermarket sector and across the economy which are not currently captured by existing laws.
9.48The committee supports this position and in light of the evidence before it likewise recommends that the ACCC be given the appropriate authority to investigate and prosecute unfair trading practices.
9.49The committee recommends the Australian Government progress legislative amendments to allow the Australian Competition and Consumer Commission (ACCC) the authority to investigate and prosecute unfair trading practices.
9.50The committee recommends that The Treasury take immediate steps to make the Food and Grocery Code of Conduct mandatory, with an appropriate regime of financial and other penalties for breaches and protections against supplier retribution. The code should be made mandatory as soon as possible and no later than 30 September 2024.
9.51To ensure complete supply chain protection, the mandatory Food and Grocery Code of Conduct must include the Dairy Code of Conduct and the Horticulture Code of Conduct as schedules.
9.52The Food and Grocery Code of Conduct should:
be fully mandatory for retailers with enforceable rules;
be enforceable with substantial penalties for breaches;
include mandatory minimum standards that cannot be 'opted out' of;
be overseen by Code arbiters who are fully independent of supermarkets, who should proactively conduct random audits so suppliers have anonymity in the process;
create provisions specifically for the trading of fresh produce, reflecting the perishability of the product and the particular vulnerability of suppliers;
create a portal for suppliers to lodge issues, and once a threshold is met and a consistent theme is identified, the ACCC can investigate the issue;
investigate implementing measures under the Code that provide suppliers with improved information symmetry, which should include creating a price register for farmers to assist them in understanding market prices across primary industries; and
a public consultation period to implement all of the above.
Greenlife industry
9.53The committee heard that certain products that are defined as groceries in the Grocery Code are not protected by the Code, when sold by stores that are not a code signatory.
9.54Specifically, when greenlife products such as seedlings and plants are sold in Coles and Woolworths stores, those suppliers are protected by the Grocery Code. But when sold in Bunnings, they are not protected by the Code.
9.55Bunnings has indicated it does not believe it is appropriate for it to be covered by the Code, as it is not a traditional grocery store. The committee considers this to be a moot point. If a store sells items defined as a grocery, and has such a significant retail footprint as a big box store like Bunnings, then that store is—at least in part—a grocery store, and it should be required to abide by the laws and regulations of a grocery store.
9.56The committee was disappointed by the engagement of Bunnings throughout its inquiry. The CEOs of Coles, Woolworths, ALDI, Metcash and other major retailers all appeared before the committee, voluntarily, when asked to do so. However, the Bunnings CEO elected not to appear and to not respond directly to the evidence this committee had heard from the greenlife industry.
9.57The committee heard alarming evidence of greenlife suppliers being treated in similarly unfair ways to farmers in the horticultural sector. And just as with the supermarkets, the committee heard from Bunnings that they do not use their excessive market power to engage in unfair trading practices. Indeed, Bunnings declared no less than four times they were 'shocked' and 'saddened' to hear such accounts.
9.58The committee sees no reason indicating greenlife industries should be excluded from the Grocery Code. The committee recommends that The Treasury ensure that greenlife industries are captured by the provisions of the mandatory Grocery Code, along with any large retailer that stocks food and/grocery products—even if those products are not their main products, all such stores should be Code signatories.
9.59The committee recommends that The Treasury amend the mandatory Food and Grocery Code of Conduct to explicitly provide that:
greenlife industries are captured by the code; and
the code includes any large retailer that stocks food and/or grocery products.
Merger reforms
9.60The ACCC has noted that of the 1000 to 1500 mergers that take place in Australia each year, only 330 of those come to its attention under the current voluntary merger regime. The fact that so few mergers are subject to compulsory oversight and scrutiny is alarming, and in the context of supermarkets, does nothing to prevent the duopoly of increasing its market share without proper investigation and oversight.
9.61There have long been calls for reforms to Australia's merger laws, including recent calls to reverse the onus of proof, whereby corporations would be required to show their acquisitions are not anti-competitive, rather than the current case where government must prove otherwise. The current framework is clearly not working in the interests of the Australian public or economy.
9.62In March 2023, the ACCC outlined a range of reforms to 'strengthen the effectiveness of Australia's current merger regime' as an 'an essential ingredient in the creation and maintenance of competitive, dynamic, and resilient markets'.Supermarkets were noted in the proposal paper as being one of the areas of the economy that were 'highly concentrated with a small number of providers retaining large market shares over long periods of time'.
9.63The steady acquisition of smaller food and grocery retailers by Coles and Woolworths is significantly dampening competition in an already highly‑concentrated market. Alongside divestiture powers, merger reform will play a vital role in promoting a more competitive and diverse supermarket sector.
9.64The Australian Government published a proposal for merger reform on 10April2024. The committee suggests that the Government's proposal does not go far enough, as it does not include some important changes to merger laws as proposed by the ACCC.
9.65The committee supports the merger reforms as suggested by the ACCC and echoes the calls from the ACCC that Australia's merger regime be made fit‑for‑purpose, noting such reform will play an important role in increasing competition in and properly regulating the supermarket industry.
9.1The committee recommends that the Australian Government implement merger reforms as proposed by the Australian Competition and Consumer Commission (ACCC), including:
mandatory notification of mergers above a prescribed notification threshold, with a call-in power for proposed transactions below the threshold that raise potential competition concerns;
merger clearance tests applied by the ACCC and Tribunal on review;
reversal of the test for clearance under section 50 of the Competition and Consumer Act 2010 to require merger parties to satisfy the ACCC, or the Australian Competition Tribunal on review, that the transaction would not be likely to substantially lessen competition; and
amendments to section 50 of the Competition and Consumer Act 2010 to provide for increased focus on changes to the structural conditions resulting from a merger that may make markets less competitive and to address creeping acquisitions.
Land banking
9.66Despite their suggestions to the contrary, it appears to the committee that land banking practices are being used by supermarkets as means to reduce competition, particularly in greenfield sites. The Australian Securities and Investments Commission (ASIC) definition of land banking is 'a real estate investment scheme that involves buying large blocks of undeveloped land'. In trying to suggest that Woolworths does not engage in land banking, MrBradBanducci, CEO of Woolworths, described an approach to site acquisitions which, in essence, meets that ASIC definition.
9.67The committee heard that Coles holds around 50 development sites, some acquired up to 20 years ago, while Woolworths holds around 60 development sites, some of which were acquired nearly 30 years ago. Between the two retailers, these are significant land holdings.
9.68The committee wishes to thank Woolworths and acknowledge the comprehensive and timely way it engaged with the committee on this issue. Conversely, the committee expresses its concern and disappointment with Coles, which did not comply with similar requests from the committee, and which meant issues around land acquisition by the major retailers could not be properly interrogated.
9.69Nonetheless, evidence to the inquiry (discussed in Chapter 6), was that land banking and creeping acquisitions are used concurrently by the supermarket duopoly to solidify their position and market power in the industry. The ACCC advised the committee that zoning and planning laws should have better regard to supermarket competition, and that past site acquisition notification agreements between the ACCC and supermarkets have lapsed. It is therefore appropriate that any reforms to merger law be considered alongside issues of land banking.
9.70The committee is therefore of the view that land banking should be addressed in the merger reforms being progressed, to increase the powers of the ACCC to allow it to investigate and make recommendations to government on land banking in the supermarket sector.
9.71The committee further recommends that as part of reform to merger laws, the Australian Government provide the Australian Competition and Consumer Commission with the powers to investigate and make recommendations to government to address land banking in the supermarket sector.
Unit Pricing
9.72Unit pricing helps consumers to compare prices and find the best value for money by showing the cost of a product using standard units of measurement. Furthermore, unit pricing in an effective tool to help consumers identify and understand when stores or producers use 'shrinkflation' tactics, where the price of an item is kept the same but the item itself is made smaller—effectively making it more expensive by weight or size.
9.73To protect and enhance unit pricing, the committee supports amendments and improvements to the Unit Pricing Code. The Government should introduce a mandatory information standard for supermarkets that ensures their pricing is clear, and consistent with consumer expectations. This mandatory standard should include a requirement to prominently display a change in size and price of a product, along with any corresponding change in unit price.
9.74In addition, the Government should convene an independent, national review of the unit pricing system to identify barriers to compliance (including penalties for non-compliance, 'principles-based' requirements and the units of measure used for unit pricing) and identify opportunities to increase its effectiveness and scope.
9.75The committee recommends that the Australian Government amend the Unit Pricing Code made under the Competition and Consumer Act 2010, so that supermarkets are required to:
adopt a mandatory information standard for unit pricing, including improvements to the legibility and prominence of unit prices, and changes in price and size of products, in line with consumer expectations;
standardise and rationalise discount and promotional terms, to prevent promotional material indicating a discount when one is not available; and
prominently disclose any changes in the price or size of a product.
9.76The committee recommends that the Australian Government ensure the Australian Competition and Consumer Commission is provided with sufficient regulatory and enforcement powers regarding the Unit Pricing Code.
9.77The committee appreciates that the ACCC is already doing important work in price monitoring and regulatory enforcement and oversight.
9.78The recommendations put forward by this committee will only increase the volume of work for the ACCC and the legislation it must administer. It is therefore crucial that the ACCC be given additional funding and resourcing to complete its work and to regulate, investigate, enforce and prosecute competition policy matters.
9.79For the avoidance of doubt and to ensure there are no unforeseen barriers to the ACCC doing its work, the committee also recommends that any legislative powers given to the ACCC be accompanied by the power to compel evidence whenever necessary.
Recommendation 10
9.80The committee recommends the Australian Government increase funding to the Australian Competition and Consumer Commission (ACCC) to ensure the ACCC is adequately funded and resourced to regulate, investigate, enforce and prosecute competition policy matters, including unfair trading practices, the Unit Pricing Code, the Food and Grocery Code of Conduct, and any other matters falling within its remit.
9.81The committee further recommends that the ACCC be given appropriate legislative powers to compel whatever information it requires as part of its investigative work.
National food waste strategy
9.82In addition to paying low wholesale prices to suppliers and charging high prices to consumers, supermarkets are contributing to the unacceptably high rates of food waste in Australia.
9.83This is both by individual supermarkets binning fresh food and grocery items, but also by the enforcement of unrealistic cosmetic standards on fresh foods, particularly fruit and vegetables. The committee heard of pallets of produce being turned away at the supermarket back door, or entire crops being abandoned or ploughed back into fields.
9.84In the current environment of cost of living pressures and climate change, this cannot be allowed to continue. Whether a supermarket is appropriately managing food waste should not come down to individual store managers; there is clearly an absence of a consistent best practice approach to this issue, while foodbanks and other charities are being overwhelmed.
9.85The committee recommends that in order to address food waste in the supermarket chain, the Department of Climate Change, Energy the Environment and Water should update and broadly consult on the 2017 National Food Waste Strategy to:
ensure supermarkets publish regular data on how much food they donate to foodbanks, throw in the bin (the reasons why they throw it in the bin), and how much fresh produce they reject from growers;
investigate how cosmetic standards impact farmers and whether there should be independent standards;
investigate reforming to use-by and best-before labels to reduce wastage of edible food due to consumer confusion; and
ensure these changes have a widely consulted public consultation period.
9.86The committee recommends that the Department of Climate Change, Energy, the Environment and Water update the 2017 National Food Waste Strategy to include a best-practice, nation-wide approach to addressing food waste in the supermarket chain. The updated strategy should consider:
reform of the use-by and best-before labels and their role in food wastage and consumer confusion;
whether unrealistic cosmetic standards are adversely affecting farmers and the quantity of food waste across the country; and
a requirement for supermarkets to publish regular data on food waste volumes, including food rejected for cosmetic reasons and food donated to foodbanks and similar charities.
9.87The committee recommends that the above reforms be progressed following a public consultation period.
Retail worker wages and conditions
9.88Tragically, the committee heard that supermarket workers—some of the lowest paid workers in Australia—are often the ones copping the anger from a public fed up with being ripped off by supermarkets. This anger and frustration can manifest in ways that create working environments that are clearly a breach of the work health and safety standards that all workers should expect in their workplace.
9.89The committee appreciates that many of these incidents are outside the control of the supermarket chains, and don't doubt that the employers take this seriously. The committee shares the view that there is never a reason why anyone should be abused in their workplace. Nonetheless, as employers it is beholden to both Coles and Woolworths—as with all other employers—to create and maintain safe working spaces for employees wherever possible, to the fullest extent possible.
9.90The committee calls on supermarkets to do more to improve the health and safety standards for supermarket employees, to ensure supermarket workers are appropriately protected from customer abuse.
Multinational food companies and 'big box' companies
Multinational companies
9.91As part of its work, the committee invited the following companies to appear before it at a public hearing: Coca-Cola Europacific Partners; Kellanova (formerly Kellogs); Kraft Heinz Australia; Mars Australia; Nestle Australia; PepsiCo Australia; Procter & Gamble Australia; and Unilever Australia.
9.92All eight companies declined the committee's invitation, much to the committee's dissatisfaction. All companies argued that they were given insufficient time in which to prepare for the hearing, and further, that their CEOs and other key executives were on leave and/or overseas. As a result, the committee instead requested written submissions from these companies and placed written questions on notice to them—however, this did not give the committee the ability to properly interrogate the evidence put forward.
9.93The committee would expect that when invited to appear before a Senate committee, companies as large as those invited would have enough personnel to appear before the committee, regardless of the availability of the CEO or other executives. To say that officials were unavailable seems somewhat disingenuous to the committee.
9.94While these companies have now provided submissions and other written materials to the committee, this information came in far too late for the committee to interrogate it or engage with it in any meaningful way.
9.95This is an unsatisfactory outcome, but noting this committee must conclude, members will seek to continue this work in other ways. The committee therefore recommends a referral to the Senate's Economics References Committee, to ensure that these companies are given ample opportunity to face scrutiny and answer to the Australian public for their role in the cost of living crisis.
9.96The committee recommends that the Senate refer to the Economics References Committee the following matters for inquiry and report by the last sitting day of February 2025:
The role of multinational food manufacturers in the supermarket industry in Australia, with particular reference to:
-the bargaining power of multinational food companies when engaging with Australian supermarkets;
-the process of multinational food companies in negotiating price changes with Australian supermarkets and retailers;
-the role of the multinational food companies in price setting and how this impacts on food prices;
-the price of company products in other jurisdictions and how these compare to Australia; and
-any related matters.
Big box companies
9.97The committee received some evidence about the actions of the big box retailers—and in particular Bunnings—which is increasingly selling products that would traditionally fall into the food and grocery sector.
9.98Big box retailers did not engage with this committee, but are key players in the supermarket space and in the retail sector more broadly. The committee suggests that these big box stores should be subject to an inquiry of their own.
9.99Together, the committee's recommendations for inquiries into multinational and big box companies will increase transparency around pricing practices and market behaviours, and their role the cost of living challenges currently facing Australians.
9.100The committee recommends that the Senate refer to the Economics References Committee the following matters for inquiry and report by the last sitting day of February 2025:
The role of Australia's 'big box' retailers in price setting, with particular reference to:
- the market behaviours of such retailers, including price negotiation practices and engagement with suppliers;
-acquisition and use of land; and
-any other related matters.
Senator Nick McKim
Chair