In the midst of Australia's cost of living debate, the National Farmers Federation (NFF) has voiced that the option to dismantle the supermarket duopoly of Coles and Woolworths, holding a 65% market share, should remain open. This comes as a Greens-led parliamentary inquiry delves into the pricing and competition tactics of these retail behemoths, amidst accusations of exploiting both consumers and suppliers for profit. Despite these claims, both supermarkets refute such allegations, attributing their financial success to efficiency gains rather than predatory pricing or supplier exploitation.
Jeremy Griffith from the NFF's horticulture committee stressed the importance of retaining divestiture powers to potentially disband the supermarket giants to foster competition. He referenced historical precedents of supermarket de-mergers to illustrate the feasibility of such actions. Contrary to the NFF's stance, Prime Minister Anthony Albanese has dismissed the notion of breaking up these firms, emphasizing Australia's commitment to a free market economy over governmental overreach.
Griffith further highlighted the vulnerable position of fruit and vegetable suppliers, who face significant pressure from supermarkets due to the perishable nature of their goods. He criticized the current market dynamics, where suppliers bear the brunt of price discounts, leading to squeezed margins despite rising production costs. The NFF advocates for enhanced regulatory oversight and specific legislation to curb the dominance of Coles and Woolworths, alongside measures to protect growers from aggressive procurement practices.
The Australian government is reviewing the voluntary Food and Grocery Code of Conduct, which governs the relationship between supermarkets and their suppliers, in light of these ongoing concerns.
Source: news.com.au