Former Labor Minister Appointed to Lead ‘Grocery Review’ Into Coles and Woolworths

A variety of seasonal fruits is displayed outside a supermarket in Albany, Western Australia, on Dec. 22, 2023. Susan Mortimer/The Epoch Times

Former Labor Minister Craig Emerson will lead a review into the Food and Grocery code amid concerns about supermarket prices.

The independent probe will review the food and grocery “code of conduct” in a bid to ensure supermarkets are providing a fair deal to customers and farmers.

Major supermarket giants Coles and Woolworths are signatories to this code, along with Aldi and Metcash.

The call for a review comes after Nationals Party leader David Littleproud called for an Australian Competition and Consumer Commission (ACCC) inquiry into fruit and vegetable prices.

Farmers have raised concerns about the gap between what they are paid for produce, and prices at supermarkets.

For example, one Victorian framer raised concerns that supermarkets were buying product for $1.80 a kilogram, and then retailing it for $4.99 per kilo.

Prime Minister Anthony Albanese said if further action was needed, the government would “not hesitate” to take action.

“We have been clear—if the price for meat and fruit and vegetables is going down at the farm gate then families should be seeing cheaper prices on supermarket shelves too,” he said.

“Supermarkets have a duty to make sure they’re providing affordable options for all Australians, especially when they’re making savings on their own costs.

“We’ve made looking after consumers a key priority over the past 18 months and we’ll keep looking at every option to make sure Australians aren’t paying more than they should or getting less than they deserve.”

Mr. Emerson, appointed to conduct the review, served under the Rudd and Gillard governments as minister for small business, competition policy, and consumer affairs and trade. He also worked as a senior economic advisor to former Prime Minister Bob Hawke.

The code, prescribed under the Competition and Consumer Act 2010, regulates the conduct of grocery retailers and wholesalers with suppliers.

Coles shares slid 1.35 percent on the market on Jan. 10 to $16.03, while Woolworths shares slipped nearly 1 percent to close at $36.79.

National Farmers Federation Responds

National Farmers Federation (NFF) president David Jochinke said the code in its current form is “failing farmers” and should be made mandatory.

“We need to get to the bottom of why there’s a growing gap between what farmers get paid and what produce is being sold for on supermarket shelves,” he said.

A man walks past a Woolworths supermarket on York Street in Sydney, Australia, on Aug. 24, 2022. Lisa Maree Williams/Getty Images

“It’s not just supermarkets we need answers from, we need to know who else in the supply chain is clipping the ticket and sending food prices skywards.”

The NFF said small family farming businesses are “at the mercy” of large corporates, who dominate Australia’s food supply chain.

“As the cost of farming and the cost of living go through the roof, now is the time to correct this power imbalance and improve market price transparency so it’s not being used against farmers,” he said.

“Farmers need to understand how the price they are paid is determined, as should consumers. There are so many unknowns in farming, but pricing doesn’t have to be one of them.”

The Australian economy as a whole has been hit by inflationary pressures due to issues such as rising petrol prices (which feed into logistics costs), and labour shortages (which drive up wage costs).

On Jan. 7, Shadow Agriculture Minister Mr. Littleproud called for the ACCC to look into fruit and vegetables and ensure supermarkets pay their fair share.

He said farmers are walking away because “supermarkets are taking them for a ride.” Mr. Littleproud described the matter as “urgent,” and said a Senate inquiry into food prices would not go far enough.

“I’ve previously called for an ACCC inquiry into beef and lamb but it must also now investigate fruit and vegetables—we need to investigate the price disparity, compel CEOs to give evidence, and have greater penalties for those who do the wrong thing, including not paying farmers at a fair price,” he said.

Supermarket Prices Don’t Pass the ‘Pub Test’: Minister

Agriculture Minister Murray Watt said retailers should start dropping their prices to reflect the lower prices farmers are receiving for their produce.

“Farmers deserve a fair price for their hard work and the some of the prices supermarkets are charging just don’t pass the pub test,” he said.

“While the government is getting on with taking action on the cost of groceries, the ball is in the court of the big retailers.”

Meanwhile, Treasurer Jim Chalmers said the government expects all companies to treat Australians “fairly,” including the food and grocery sector.

“When the price of meat and fruit and veggies comes down for supermarkets, it should come down for families as well—it’s a big chance for the big supermarkets to do the right thing,” he said.

“As a government we’re taking a fresh look at the Food and Grocery Code of Conduct to make sure the sector is giving consumers and suppliers a fair deal.”

Coles reported a net profit after tax of $1.1 billion in the 2023 financial year, while Woolworths delivered a $1.7 billion dollar profit.