House debates

Monday, 18 March 2024

Private Members' Business

Grocery Prices

10:02 am

Photo of Andrew GeeAndrew Gee (Calare, Independent) Share this | | Hansard source

by leave—On behalf of the member for Kennedy, I move:

That this House calls on the Government to immediately legislate for significant reform of Australia's food retail sector to better protect Australian farmers and consumers, by:

(1) divesting to reduce the market share of the major two corporations in the food retail sector;

(2) imposing a customs tariff of five per cent on imported products in recognition of the economic, social and environmental impacts of imports;

(3) introducing a maximum markup of 100 per cent on all produce between farmer (processor) and retail outlet; and

(4) removing the Food and Grocery Code of Conduct as a measure which has long been used to control and restrain suppliers and producers.

It is very clear to the whole country that the major supermarkets have too much power, and they are doing great harm to farmers and consumers right around Australia. Indeed, last week the member for Kennedy came to the electorate of Calare to draw attention to this behaviour and inform the House of the important work that the independents are undertaking to bring justice and a level playing field to farmers and also to consumers in the way that they interact and deal with the major supermarkets.

Just a couple of weeks ago the member for Kennedy and member for Clark famously dressed up as pigs. It was a lighthearted moment to draw attention to a very, very serious issue. With the Senate inquiry into supermarket prices in Orange last week, the member for Kennedy came to Orange—and, yes, there were a couple of pigs there as well—to draw attention to the fact that the supermarkets' snouts are in the money trough. They are rolling around in massive profits, and yet they pay our farmers a pittance and price gouge customers on the way through. Urgent action is required to give our farmers and our consumers a fair go. The point that the member for Kennedy and I were making in Orange last week was that talking about action is not good enough. Words have to be backed up by deeds.

The National Party and the Liberal Party had nine years to tame the supermarket hogs, and they failed. They introduced the grocery code of conduct, and it has turned out to be an absolute dud which has not stopped the price gouging. The National Party and the Liberal Party also introduced laws on the misuse of market power, which have been ineffective in taming the hogs. Calling for the grocery code of conduct to be mandatory is a waste of time. If the grocery code of conduct worked, we wouldn't be having inquiry after inquiry after inquiry. What we want is for the major parties to get behind our Reducing Supermarket Dominance Bill. That's why the Independents are taking action on this. It would significantly shake up the behaviour of the big supermarkets, it would wind back their profit share and level the playing field and it would reduce their supermarket power to 20 per cent over five years. It would also bring in a maximum 100 per cent markup for supermarkets—they're currently marking up by hundreds of per cent—to give farmers and consumers a better deal. The dud Food and Grocery Code of Conduct has failed, and making it mandatory won't do a thing.

We want the National Party, the Liberal Party and the Labor Party—all parties—to not just hold press conferences and talk about taking action. We want them to actually vote in favour of this game-changing legislation. If you're not prepared to back up your big talk with a vote in parliament, it's all about hot air and porkies. We want the major parties to back up their words with deeds. Stop talking the talk and start walking the walk. We want everyone to vote for the Reducing Supermarket Dominance Bill and help get those supermarket snouts out of the trough. Our farmers deserve nothing less. Consumers around our country deserve nothing less. I would urge all members of this House to get behind our game-changing legislation brought to you by the Independents and the crossbench.

Photo of Milton DickMilton Dick (Speaker) Share this | | Hansard source

Is the motion seconded?

Photo of Russell BroadbentRussell Broadbent (Monash, Independent) Share this | | Hansard source

I second the motion and reserve my right to speak.

10:08 am

Photo of Tania LawrenceTania Lawrence (Hasluck, Australian Labor Party) Share this | | Hansard source

I speak against the specifics of this motion, but in doing so I commend the member for Kennedy for the spirit of the motion and for the care he's shown over the now many years for consumers and particularly for the producers of the food we eat. I'll quote the member for Kennedy. In March 2007, speaking on this issue in this place, he said, 'You need to involve people who are at the coalface.' The good member then gave the example of a lychee farm in Kennedy who had a perfectly good product returned by the retailer not for any quality reason but due to the movement of prices. Kennedy 2007 is a long way from Hasluck 2024, but the same issues persist across our country. If anything, the imbalance of power between producers, distributors and retailers has worsened.

I recently had cause to refer a local matter to the ACCC. Some of my constituents working at the coalface—grape-growing families who have been feeding us for generations—found that their product was suddenly not required and then, by the time it got on the shelves, had been sitting too long to fetch its premium price. This recent story of the table grape growers in the beautiful Swan Valley serves to illustrate the problems we're seeing around the country, because by the time the growers had contacted me they were already facing significant losses—through no fault of their own. As I said, some of these growers have been producing and supplying grapes to the local market for over 50 years. But, with product on the vine and picking imminent, to be informed that their varieties would no longer be accepted by the major retailers is a situation that is untenable—they received no proper notice and no good reason. Finding a market, obviously, is challenging when you only have a very small supermarket retail chain. As the member for Kennedy has said previously, where an imbalance of power is exercised in relation to perishable goods—and of course much of our agricultural product is just that—producers have nowhere to go. It's simply impractical to say, 'Well, we'll find another market.' It isn't going to happen easily in Kennedy, nor in Hasluck. The concentration of retail power is a huge part of this; another part, a real chokepoint, is the situation where there's a sole distributor sitting between producers and the few retailers.

Additionally, many fruits and other products these days are the subject of proprietary strains and many of these patented products are owned by international interests. They license few growers and fewer distributors, and they guard their intellectual property jealously. They have an interest in seeing their products advanced and others shut out from the supermarket shelves. This was very much the experience unfolding in my electorate amongst the grape growers.

The member for Kennedy will agree that little has occurred in this policy space over the nine years of the coalition government. The Liberal and the National administrators were a conga line of hopelessness across many areas of government—and we just heard a reference to the code which they introduced as a dud. In contrast, the Albanese government is acting in the competition space, and I'll mention a few of ways in a moment. Both the Treasurer and the assistant minister for competition, the member for Fenner, are clearly interested in reform in this sector. Further, the Standing Committee on Economics, of which I'm a member, has also been inquiring into competition and economic dynamism, and will report very shortly. I acknowledge the leadership of the committee chair, the member for Fraser. The member for Fraser was born in Italy, where five companies share about 75 per cent of supermarket retail, which we may well say is actually twice as healthy as competition here. Most international comparisons indicate that we do have a serious issue. The member for Kennedy has made that point many times over the years.

To the motion: we're actually introducing serious reform. We've increased the penalties for anti-competitive conduct; we've banned unfair contract terms; we've initiated the Treasury's Competition Taskforce; we're legislating for a new designated complaints functions within the ACCC; we've commissioned the ACCC review of supermarket pricing; and, importantly, we have also initiated a review into that dud food and grocery code that we heard referred to previously. We've also funded CHOICE to provide comparison information for consumers. We are taking it seriously. We will take action.

10:13 am

Photo of Russell BroadbentRussell Broadbent (Monash, Independent) Share this | | Hansard source

I seconded this motion for a reason: I seconded this motion so that this parliament would discuss the issue around the size of the market held by supermarkets. Philosophically, I probably don't sit well with the motion that Mr Katter has put forward but I'm happy to second it so that the parliament can have the discussion.

Access to healthy, fresh food should not be a luxury in this country. We all realise the prices people are paying at the moment seem to be inflated beyond their control and beyond the household budget. What we're facing here is that the market dominance of the supermarkets is probably unprecedented in nations around the world. If we compare ourselves with the UK, the biggest player in their market is around 28 per cent. In the US the biggest player in the market is around 25 per cent. In Australia the biggest player in the market is 37 per cent. With our second biggest player having a larger nominal share than the share that the largest supermarket in the US has, just two supermarkets account for 60 per cent of the market share and prove how lacking competition is in the sector. You already know which two supermarkets I'm talking about.

Of course, there's a choice. In Melbourne you can seek out a retailer that may be a long way away from you but will give you a better price. I asked a customer the other day—I'm not sure whether I'm allowed to name names here—in the ALDI store, 'Do you believe you get a better price shopping at ALDI than you do at the major supermarkets?' She said: 'Absolutely. This is my major shop for the week.' It was about $275 for her major shop. She lives with her daughter. In that process, she said, 'Yes, I think I'm this many dollars better off by shopping at that particular store.' So in Australia you can still seek out, if you're prepared to look and travel, opportunities for independent supermarkets.

Where I have a problem with the bill put forward is that, even though the member for Hasluck a few minutes ago outlined all the programs that the government has in place to fight against the monopoly, the market happens very quickly. I'm a former retailer. The market happens on that day in that week in that time. By the time all the inquiries that you might have with the ACCC or any other body over price gouging are held and done, the damage is done. It's all over—it's finished—for the retailer. In my own area, when a major player in the market in my industry came in to my community, I knew that our retail model was over, finished, gone. It took a long time for me to explain that to my family—that we were now finished—because we couldn't compete in the marketplace with such an enormous organisation. Therefore, businesses like mine disappeared not just in my area but right across Australia because the big organisation came in and took over from the very small.

In the inquiry that's currently going on in Australia with regard to food prices—or whatever the inquiry is called—it was really interesting to hear the apple growers and what they're going through at the moment and the fact that many of them are ripping their plants out of the ground because they can't put apples on the shelf—you'd know this in South Australia—because of what it costs them to produce it. In fact, the gap is enormous. Some of their produce is perfect to eat, but, because it's slightly the wrong colour, it gets rejected, for heaven's sake. So 30 per cent of this beautiful product here in Australia is thrown out or sent back to the grower just to be ploughed in or thrown down the tip.

What I'm putting to the House is that it's good to have this discussion around how we deliver food into households in Australia but remember that we're dealing with a marketplace which is moving quickly every day and you've got to be a very big supplier to supply a very big supermarket. So the smaller man is left out. If you want that change, you have to change how you are supporting the smaller operators and the smaller growers.

10:18 am

Photo of Steve GeorganasSteve Georganas (Adelaide, Australian Labor Party) Share this | | Hansard source

I'd like to thank the member for Kennedy for moving this motion, for highlighting such an important issue that we have in this nation at the moment—that is, the duopoly of the supermarkets. I couldn't agree more with the member for Monash on some of his comments in terms of the two retailers for supermarket goods having a 37 per cent share of everything sold in this nation. But, if you add on to that all their other retail outlets—liquor stores and a whole range of other things—it actually adds up to 70 per cent. So two retailers in this nation have a 70 per cent market share of everything being sold in retail in this country.

That is astonishing when you think about how we have let ourselves come to this, to have a duopoly of two massive supermarkets selling 70 per cent of everything that's sold in retail, from petrol right through to what is sold at bottle shops—liquor, wines et cetera. It is humungous. In most other countries they would be divested and broken up, but we've allowed them to take hold in this nation. We're seeing an unprecedented rise in supermarket costs at the moment. I speak regularly to people in my electorate, and they're doing it tough. It is the biggest expense that they have in the family budget. Going to the supermarket is a necessity. It's not like saying you'll get a new TV or a new pair of shoes, or putting off that holiday because you can't afford it. The supermarket is a necessity. You must go there every week to shop and to feed your family. It is a terrible situation that we're in.

One of the small investigations that I've done is on Nescafe, a popular brand we all know. Twelve months ago, a 500 gram tin of Nescafe was retailing at these outlets for approximately $14 to $16. Today that price is $28, a 100 per cent increase. You may say that energy prices and a whole range of other costs have gone up, but this is a 100 per cent increase on one particular product, and there are many other products that we're seeing the two big supermarkets raising the prices for.

We do listen to our constituents, and that's why on this side of the House we are rolling up our sleeves and doing everything that we can in our electorates to get a fair deal for our constituents. On top of a lot of other things with the cost of living, we've slashed the cost of medicines, improved paid parental leave, and done a whole range of other things to try and assist families. We want to ensure that supermarkets are doing the right thing by our constituents. We want to make sure that there's no gouging taking place. We want to make sure they are being fair—of course, fair to the point where they can make a profit for their shareholders but, at the same time, charge fair prices to the Australian people. The aim is to make Australia fair, whether you're a consumer, a business owner or a farmer.

To address this issue, we've initiated a thorough review through the ACCC to examine supermarket pricing, which hasn't been done for well over 10 years. This 12-month inquiry is a significant effort. It hasn't been done since 2008. We want to make sure that every dollar that Australians spend in supermarkets goes a long way because Aussies deserve a fair go. Many years ago, when I was growing up in the western suburbs of Adelaide, just around the corner from our street we had four little shops. Self-employed families ran these shops. Today there are none. There are no butchers and there are no small shops selling bread, milk, butter et cetera. We have two massive supermarkets in that area, and all these other little shops have closed.

We know that when some of these big multinationals make the plans to open up a supermarket they can actually run at a loss for 10 years—which does what? Initially you'd get cheaper prices, but eventually everything shuts around them and they have a complete monopoly on everything that's being sold. That's why the ACCC's inquiry is going to cover various aspects, including the pricing practice and other practices; the challenges faced by smaller retailers, especially in regional and remote areas; factors affecting price along the supply chain; and potential obstacles to fair competition. What we need is more competition, fair competition and more players in the market, but certainly the ACCC will get to the bottom of this.

Photo of Milton DickMilton Dick (Speaker) Share this | | Hansard source

The time allocated for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.