Consumer and Industry Agreement calls for Supermarket Ombudsman


JOINT MEDIA RELEASE

CHOICE and AFGC

CHOICE and the Australian Food and Grocery Council (AFGC) have called for the establishment of a Supermarket Ombudsman as a part of a joint submission to Senate Economics Committee’s inquiry into the impacts of supermarket price decisions on the dairy industry.

The Ombudsman would help create a level playing field in the highly-concentrated retail and supermarket industry and provide much-needed leadership in reforming the sector to benefit consumers and the wider industry.

CHOICE and the AFGC believe the Ombudsman would promote transparency in pricing and fairness along the supply chain and provide recourse for those participants in the food and grocery sector who lack market power, particularly small business, small-to-medium food manufacturers and consumers.

Nick Stace CEO of CHOICE said the agreement with AFGC was exceptional in bringing together two organisations who sometimes featured on different sides of policy debates, but who had a common interest in addressing the perceived lack of competition in the market as there is only two supermarket players who control up to 80 per cent of the packaged food and grocery market.

“CHOICE believes cheaper groceries are a fundamentally good thing, but we question whether recent actions from the major supermarkets are a sign of genuine competition or a short-term strategy that may erode competition further and see price rises in the future. We believe real leadership is needed to address the whole-of-market problems that arise when one or two players drive the industry, whether that is retailers or suppliers,” he said.

AFGC Chief Executive Kate Carnell said there was an urgent need for a Supermarket Ombudsman following the recent aggressive price discounting by major supermarkets, pointing to the issue of market power and its impacts on industry.

“This is all about creating a level playing field for manufacturers and consumers. If the current ‘price war’ continues, the profitability of Australian food manufacturing sector, including farmers, will be eroded and the result could be a significant loss of both processors and producers,” Ms Carnell said.

The Ombudsman would help promote genuine competition by ensuring that regulators enforced their rules, and where these were found lacking, by suggesting changes. The role would also support consumer education on unit pricing and be proactive in investigating what is happening in the market.

For more details, including the joint submission from CHOICE and AFGC, go to   www.afgc.org.au/doc-library/category/11-general-documents.html?download=487%3Achoice-and-the-afgc-on-the-impacts-of-supermarket-price-decisions-on-the-dairy-industry

Media Enquires:

  • CHOICE Head of Media: Ingrid Just (02) 9577 3239 or 0430 172 669
  • AFGC Media manager: Brad Watts (02) 6270 9021 or 0437 379 818

Notes to editors:

  • CHOICE and the AFGC have made a joint supplementary submission to the Senate Economics Committee’s current inquiry into the impacts of supermarket price decisions on the dairy industry, providing an outline of options for the establishment of a Supermarket Ombudsman.
  • In one option, the Supermarket Ombudsman would sit as an independent office with the existing Australian Competition and Consumer Commission (ACCC), but would bring a much greater level of transparency, scrutiny and leadership to issues around competition in the grocery sector.
  • There is a precedent for this type of office, with the UK Government introducing a Groceries Code Adjudicator to ensure fairness in relationships between supermarkets and suppliers.
  • The key test for the Supermarket Ombudsman would be for it to make tangible improvements to competition benefitting both industry and consumers. With this in mind, the proposal includes a ‘sunset clause’ that would provide an in-built review point, for example after five years of operation.

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