02.More competition needed
With Australia’s major supermarkets locked in a price-war that has seen generic milk prices drop to $1-a-litre, there are concerns about the impacts of the discounts on dairy farmers. Politicians have waded into the debate, with the Parliament’s Senate Economics Committee holding an inquiry into the issue.
CHOICE has made a submission to the inquiry, questioning whether the $1-a-litre discounts are a sign of genuine and healthy competition. In our view, consumers do not 'win' if heavy discounting in the short term has the effect of reducing product choice or undermining food security in the medium or long term.
CHOICE believes that the milk price battle shows the need for greater competition in the supermarket sector, and also highlights the impacts of the growth in major supermarket generic brands and issues around future food prices and food security. We believe these issues demand a whole-of-government approach to a National Food Policy that addresses information and regulatory gaps.
CHOICE is also calling for a Supermarket Ombudsman to tackle competition and fairness issues across the grocery sector. The role would involve promoting and protecting competition amongst supermarkets and promote better enforcement of existing legislation. A Supermarket Ombudsman would be well placed to consider all pieces of the ‘puzzle’ along the food supply chain, and would be able to direct research priorities under a National Food Policy.
Read the CHOICE submission to the Senate’s inquiry into the impacts of discounted milk prices. And read our article on milk.