Senate grocery prices committee sets date for Coles and Woolworths bosses to appear for testimony

Adrian Lowe
The Nightly
3 Min Read
Outgoing Woolworths boss Brad Banducci and Coles chief executive Leah Weckert.
Outgoing Woolworths boss Brad Banducci and Coles chief executive Leah Weckert. Credit: The West Australian

Bosses of the nation’s biggest supermarkets will face the Senate in a matter of days in some of the most highly anticipated public hearings in years.

The Senate committee examining supermarket prices will hold another three public hearings — on Thursday, and again for two days from Monday April 15.

The Senate on Tuesday disclosed that representatives from Woolworths and Coles are scheduled to appear next Tuesday, April 16. Chief executives Brad Banducci and Leah Weckert have committed to appearing in person to give evidence.

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The committee, chaired by Greens Senator Nick McKim, is investigating the price-setting practices and market power of the major supermarkets amid accusations they are price-gouging and using the cover of high inflation to push shelf prices higher, as well as mistreating suppliers.

Both deny these suggestions and in submissions to the inquiry said their profit margins were particularly skinny — Woolworths saying it made about 3.6¢ on every $1 of revenue, while Coles said for every $100 of revenue its profit was $2.57.

The hearings come just days after the release of an interim review of the supermarket code of practice, which recommended stronger fines for breaches, and making the code mandatory.

Both Mr Banducci and Ms Weckert in February while reporting half-yearly financial results said competition was healthy and increasing, particularly in grocery adjacent categories such as health and personal care — toothpaste, toilet paper and other household goods. Retailers such as Chemist Warehouse and The Reject Shop have increased their stake in these categories and reported stronger profit margins.

The Senate inquiry is but one such intervention by politicians, with the Federal Government also ordering a review of the Food and Grocery Code and an Australian Competition and Consumer Commission inquiry into the grocery sector. The Queensland Government is also conducting a review while similar moves are being debated in SA and Victoria.

The Federal Opposition is also formulating proposals that could break up the supermarket giants if they misuse their market power, while the Greens want Australian competition law to includes powers of divestiture.

Comments last week by Opposition Leader Peter Dutton about property purchases by Coles and Woolworths — purportedly to block competitors — echoed Senate inquiry submissions from Metcash, which supplies IGA. It said the “creeping acquistions” by the majors of independent supermarkets hurt shoppers.

Woolworths and Coles submitted to the Senate that costs including transport, store costs, such as wages, utilities and rent, and taxes had increased whereas profits had remained relatively stable over recent years.

Both argued competition was healthy. Woolworths reported 86 per cent of its customers have shopped with Coles, Aldi or IGA in the past year and about one in six have shopped with another retailer on the same day they have been to Woolworths.

Coles said the supermarket sector was in a period of “structural change”, with Aldi, Costco and Amazon stepping up their Australian presence, outfits Woolworths said gave it “robust competition”.

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