Paul Murray: Federal Government’s supermarket spin adds fuel to the ire over petrol prices

A government heading for possible defeat at the polls always likes to create at least one scapegoat to blame for its failings.

Having largely failed to put a Soweto necklace on the Reserve Bank for the mortgage-stress component of our cost-of-living crisis, the Albanese Government has now lined up the supermarkets.

Labor has form in this area.

Readers without very long memories will recall the Rudd government came up with GroceryWatch in 2008, the brainchild of the then assistant treasurer, a brash young MP called Chris Bowen, who these days dabbles in lightweight ideas like green hydrogen.

But the grocery scheme died in a ditch a year later, just days before Bowen was due to launch it. That also sounds strangely familiar.

“The Government’s FuelWatch plan has been lambasted by economists, the Opposition and commentators, and a similar lobby is forming against GroceryWatch,” The Age previously reported in August 2008.

The newspaper described the dud — later called Grocery Choice — as “a system for publicly disclosing supermarket prices that has been recommended by the Australian Competition and Consumer Commission after its lengthy nationwide examination of the grocery industry”.

The Australian Financial Review’s Phil Coorey was more sanguine the following June: “The Government might have taken some stick at the weekend for abolishing the Grocery Choice website, but it pales against what it would have experienced had the project gone ahead. Grocery Choice was due to be launched on Wednesday.

“Grocery Choice was a spin-off of Kevin Rudd’s pre-election empathy with voters over the cost of living. A Rudd government could not mandate lower grocery prices but it would enhance competition, went the mantra.”

So here we go again. Another Labor government with its back against the wall over the cost of living dusts off the ACCC, puts it on a white charger and aims it at the supermarkets.

There’s an immediate inconsistency. The ACCC’s impotence on petrol prices.

The ACCC sees problems with the supermarkets’ alleged manipulation of prices on a handful of groceries, but finds no fault with petrol companies doing the same each week with the so-called “fuel price cycle”.

Every week, the same petroleum products are sold sometimes for 50¢ a litre more on one day than another and then fall several days later to the original price.

This “cycle” must be one of the most obvious forms of price signalling in the world, but our consumer watchdog has never laid a glove on it.

Why is it so?

But back to scapegoating.

Anthony Albanese and his doctrinaire Treasurer Jim Chalmers isolated the Reserve Bank early on to wear their deficiencies in bringing down COVID-era inflationary pressures through a lack of economic discipline in their early years in office.

Keeping faith with the unions by pumping up stagnant wages growth, throwing open the borders to seek a migration-fuelled uptick in growth and allowing the States to spend like drunken sailors overwhelmed by the more pressing obligation to assist the RBA reduce inflation and lift the burden on mortgage-saddled families.

The persistence of RBA governor Michele Bullock in holding the righteous line pursued by her predecessor only amplifies the disgust honest people should feel for the way Philip Lowe was hounded out of the job by Labor.

For just doing his job. Politics doesn’t get much filthier.

Bullock’s indefatigable adherence to the RBA’s charter in the face of bullying by Chalmers and his mates has left Labor without a propaganda win and in need of another scapegoat.

Enter the major supermarkets, Coles and Woolworths, also victims of inflation.

Now, given the vigour with which the two retail behemoths decided to play politics over the Voice referendum — obviously with a misguided commercial imperative in mind — it’s hard to feel much sympathy for the way the worm has turned.

The morality tale about the scorpion and the frog comes to mind.

But while there is always room for criticism of two big players dominating any market, there is also ample space to question the mud being thrown at them by desperate politicians.

Australians are rightly wary of the power exerted by the alleged duopoly.

They should also be wary of being played for mugs — again — by Albanese and Chalmers for political ends.

This is not a black-and-white issue. Little is in politics these days.

So go to motive. It’s always illustrative.

Does Labor have more to gain by painting the supermarkets as grasping rascals than the corporations have in losing faith with their customers by underhand sales tactics?

That’s a serious question. The duopoly spends billions continuously building trust with shoppers. The political parties are minnows by comparison, needing to curry favour only every three or four years.

Having saddled the supermarket giants with an ACCC inquiry which is due to report by February 28 next year, the investigator mid-inquiry has decided to prosecute Coles and Woolworths for allegedly misleading consumers through discount pricing claims.

Interestingly, the media coverage of the action initially focused on just two products, which the ACCC fed them.

Will the average shopper be influenced by the alleged manipulation of the price of Oreo biscuits and Strepsils cough lozenges — which many would never buy — or by their own lived shopping experiences?

The two major supermarkets stock around 20,000 to 30,000 different products at any time over a year.

But an examination of the ACCC case discloses its allegations relate to just 266 items for Woolworths at different times over 20 months, and 245 for Coles over 15 months, both to May of last year.

So even if the rorting is confirmed, what real effect would it have had on the average shoppers’ cost of living?

And what about the other possibly 29,700-odd products they stock? Were their prices being properly discounted? And were such price falls offset against the other rises?

The items chosen as evidence by the ACCC are also worth considering. Check it against your own list of essentials.

For Woolworths, they are Arnott’s Tim Tams biscuits, Dolmio sauces, Doritos salsa, Energizer batteries, Friskies cat food, Kellogg’s cereal, President butter, Listerine mouthwash, Moccona coffee capsules, Mother energy drinks, Mr Chen’s noodles, Nicorette patches, Ocean Blue smoked salmon, Oreo cookies, Palmolive dishwashing liquid, Raid insect spray, Sprite soft drink, Stayfree pads, Twisties, Uncle Tobys muesli bars, and Vicks VapoDrops.

For Coles, it’s Arnott’s Shapes biscuits, Band-Aids, Bega cheese, Cadbury chocolates, Coca Cola soft drink, Colgate toothpaste, Danone yoghurt, Dettol multi-purpose wipes, Fab laundry liquid, Karicare formula, Kellogg’s snack bars, Kleenex tissues, Libra tampons, Lurpak butter, Maggi two-minute noodles, Nature’s Gift dog food, Nescafe instant coffee, Palmolive shampoo, Rexona deodorant, Sakata rice crackers, Sanitarium Weet-Bix cereal, Strepsils lozenges, Sunrice rice, Tena pads, Viva paper towels, Whiskas cat food, and Zafarelli pasta.

Where’s the meat, milk, veggies, bread and cheese that make up so much of our purchases? Or any of their “own brand” lines?

The ACCC says its allegations relate to products sold at regular long-term prices which remained the same, excluding short-term specials, for at least six months and in many cases for at least a year. Unlike petrol.

The groceries were then allegedly subject to price rises of at least 15 per cent for brief periods, before being placed in discount promotions. Like petrol.

The interim report of the ACCC’s current inquiry came out in August and found that since its 2008 probe — which led to the discarded GroceryWatch — the supermarket industry remained highly concentrated, even with the addition of 590 Aldi stores.

It says Aldi’s 9 per cent share of sales provides “only a partial constraint on Coles and Woolworths” and the two major players “appear to price at similar levels”. Like the petrol companies.

The interim report made no conclusions about the level of profitability and margins charged by the majors — but clearly intends to do so by next February.

However, the ACCC says the inquiry will not consider the issues in dispute in the legal proceedings, pointing to its obvious conflict of interest.

Coles and Woolies are big and ugly enough to look after themselves in court, which they will do with the best lawyers money can buy.

But winning in the court of public opinion is a different proposition to the difficult case lawyers say the ACCC has to prosecute.

And does anyone expect that legal action to finish before the Federal election? That’s not the government’s desirable timetable.

The political case will be rolled out daily by Labor, backed by the very existence of a supposedly independent prosecution. But just how independent is it?

The $30 million in extra funding that Chalmers doled out to the ACCC this week to “help Australians get fairer prices at the supermarket checkout” should raise eyebrows.

That was already the commission’s job with its whopping $265m annual budget.

What did the extra $30m actually buy?