Queensland Supermarket Inquiry Scrutinizes Pricing Practices and Impact on Smaller Retailers

A Queensland state-level inquiry is investigating the supermarket sector, focusing on price transparency and promoting smaller retailers, amidst allegations of dominant chains Coles and Woolworths stifling competition and hurting local businesses. The inquiry, led by a parliamentary committee, has heard from various stakeholders, including executives from major supermarkets and smaller retailers, and may lead to increased competition and better prices for consumers." This description highlights the primary topic of the article (the Queensland inquiry into the supermarket sector), the main entities involved (Coles, Woolworths, smaller retailers, and the parliamentary committee), the context (the Australian retail industry and the cost-of-living squeeze), and the potential consequences (increased competition and better prices for consumers).

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Bijay Laxmi
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Queensland Supermarket Inquiry Scrutinizes Pricing Practices and Impact on Smaller Retailers

Queensland Supermarket Inquiry Scrutinizes Pricing Practices and Impact on Smaller Retailers

In January 2024, Queensland Premier Steven Miles announced a state-level inquiry into the supermarket sector, focusing on price transparency and promoting smaller retailers. The inquiry, led by a parliamentary committee, has been holding public hearings in Brisbane to examine the gap between grocery prices and what farmers are being paid for produce during the cost-of-living squeeze.

The inquiry has heard from various stakeholders, including high-ranking executives from Coles and Woolworths, which control 65% of the sector, as well as representatives from smaller grocers like IGA and Foodworks. Smaller retailers have expressed frustration over the business tactics of the major supermarket chains, claiming they have been "annihilated" by their dominance.

Why this matters: The inquiry's findings and recommendations could have far-reaching implications for the Australian retail industry, potentially leading to increased competition and better prices for consumers. Moreover, the outcome of this inquiry may set a precedent for similar investigations into other industries, promoting greater transparency and fairness in business practices.

Luke Mackenzie, government relations manager for Metcash, which operates IGA, cited an example where Coles bought an entire shopping center in Brisbane's Milton suburb, forcing a local IGA to close. "The community is outraged that they are losing the only independent left in that market when Coles is already present twice," Mackenzie stated, urging the Australian Competition and Consumer Commission (ACCC) to "unwind" the acquisition.

Roz White, owner of an IGA supermarket on the Sunshine Coast, shared her experience of being "taken out at the knees" when a major supermarket entered her market. Wayne Mason, Foodworks state operations manager for Queensland, echoed these concerns, stating that smaller retailers being forced to close when a major supermarket moves in "happens all the time."

Premier Miles made a surprise appearance at the inquiry, pushing for more transparency from supermarket companies and expressing his desire for "practical recommendations" in the inquiry's report, due at the end of May. He questioned Woolworths and Coles executives, asking Woolworths to apologize to families struggling with soaring prices and rebuking Coles for a perceived lack of contrition.

The inquiry also heard concerns about the removal of freight subsidies, which could lead to a 351% increase in freight costs for independent retailers, ultimately affecting consumers and regional communities. "If prices go up 351 per cent for the cost of freight, that's going to be directly put on to consumers and the costs of goods are going to go up," warned Wayne Mason.

As the inquiry progresses, it remains to be seen what recommendations will be made to address the concerns raised by smaller retailers and ensure fair competition in the supermarket sector. The Queensland government's actions following the inquiry's report will be closely watched, particularly in light of the upcoming state election in October 2024.

Key Takeaways

  • Queensland Premier announces state-level inquiry into supermarket sector, focusing on price transparency and promoting smaller retailers.
  • Inquiry hears from stakeholders, including Coles, Woolworths, IGA, and Foodworks, on business tactics and competition concerns.
  • Smaller retailers claim they're being "annihilated" by major supermarket chains, citing examples of forced closures and unfair practices.
  • Inquiry's findings could lead to increased competition, better prices for consumers, and set a precedent for similar investigations into other industries.
  • Queensland government's actions following the inquiry's report will be closely watched, particularly ahead of the October 2024 state election.