4mo ago

'Limited incentive' for Coles and Woolworths to compete vigorously on price, and margins have risen, ACCC finds

www.abc.net.au Australian supermarkets among world's most profitable, with 'limited incentive' to compete

The consumer watchdog finds Australia's supermarkets are more profitable than their global peers and the two majors don't need to compete "vigorously", but the ACCC stops short of declaring grocery prices excessive.

Interesting reading the article. Would be good to see the complete ACCC report.

17 comments

I swear there's a hole in the market here. A third option that was online-only with collection points/delivery services similar to Colesworth that undercut on price.
Startup costs would be massive, though not as much as trying to enter the market as a third retailer with physical stores in all the suburbs.
It could start with a few distribution nodes (warehouses) and grow out. Order online, go to warehouse to collect. The next step where you can distribute in more suburbs or deliver to homes is where it gets most difficult.
- That was tried here, and the guy couldn't get contracts with suppliers. They didn't want to endanger their contracts with the Woolies and Foodstuffs.
  
  Those sort of exclusivity deals should be made illegal.
  Unfortunately, a Duopsony is just as destructive to the market as a Duopoly.
- I think the hole is if there was a logistics company that could handle Aldi deliveries.
  
  Aldi is a nice way to save, but, their fresh food selection is pretty meh, and often not great quality (as in, going mouldy fast, I don't care about how they look).
  I usually pair going to Aldi and an Asian supermarket
- Unfortunately delivery or transport probably ups costs… Which is why Aldi doesn’t deliver. Really sucks for someone who requires it
  
  Home delivery services are a recent offering. What did these people do before about 5 years ago?
- Well that, and immediately having wesfarmers trying to buy you out. Cf: catch

I diverge from common thoughts here. I don't want my productivity going to prop up business lobby groups. Colesworth is the result of an economic system that cannot resolve the need for more efficiencies via economies of scale monopolies and the need for much competition to get an accurate price signal. No Australian party wants to tamper with the current economic system, so it was obvious this ACCC report was leading to nothing.
- While a large part of the population is mislead about capitalism or benefitting from the system themselves, I think you'll find your sentiments are shared by many. Especially here on Lemmy.
  This system sucks.
  But yeah, our media is so fully captured by corporate interests that any proposal tooooo socialist is promptly demonised.
  Oh those profits from our minerals? Nahhhh the foreign companies deserve that. Can't have a mining tax.
  Breaking up monopolies? Nahhhh that's practically communism (despite competition being part of capitalism's rhetoric)
  Big sad :(
  At least Trump will likely secure us another term without an LNP majority government hehe

'$2.9 million over 3 years. This would be cash "to help suppliers stand up to the big supermarkets", the government said.'
I am confused, the goverment thinks there is a problem with how big supermarkets treat producers Handing over 1 million a year solves the issue?
- This SMH live post provides a bit more information: https://www.smh.com.au/national/australia-news-live-accc-puts-most-profitable-supermarkets-in-the-world-on-notice-israeli-strikes-kill-dozens-in-gaza-20250321-p5llcp.html?post=p58d1c#p58d1c
  9.01am
  Government pledges $2.9m to help suppliers stand up to supermarkets
  By Josefine Ganko
  As the ACCC supermarkets report reveals how the duopoly exerts power over consumers and suppliers, the government has announced $2.9 million in funding for produce industry associations to support education programs that will empower farmers to enforce their rights under the Food and Grocery Code.
  Speaking at a press conference in Canberra, Treasurer Jim Chalmers says the funding was about “strengthening the arms” of the groups that represent farmers and producers. Treasurer Jim Chalmers, Assistant Minister for Competition Andrew Leigh and Finance Minister Katy Gallagher at a press conference in Canberra
  
  Treasurer Jim Chalmers, Assistant Minister for Competition Andrew Leigh and Finance Minister Katy Gallagher at a press conference in Canberra Credit: Alex Ellinghausen
  “We want to make sure that when our supermarkets are negotiating with our farmers, that we can strengthen the arguments of the people who produce our food.”
  Chalmers added that Labor’s move to make the code mandatory and to introduce bigger penalties would also benefit suppliers.
  Assistant Minister for Competition Andrew Leigh added that there were particular concerns around fresh food producers being required to agree to annual contracts, but then being subjected to week-to-week bidding, with the notion they will face much lower prices at the markets if the big supermarkets don’t stock their produce.
  “This new initiative does ensure that the suppliers are going into those negotiations better able to take on the big supermarkets,” Leigh said.

If you only shop at one supermarket (but you have access to more) you're also complicit?

17 comments

Government pledges $2.9m to help suppliers stand up to supermarkets