All options are on the table for changes to supermarkets to lower the cost of groceries, the prime minister says, as the government announced a former Labor minister to lead a review into the sector.
Craig Emerson, who worked in several ministerial portfolios in the Rudd and Gillard governments, has been announced as the head of a review into the food and grocery code of conduct.
The review of the code comes as major supermarkets, which are bound to the conduct agreement, stand accused of price gouging customers.
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Prime Minister Anthony Albanese said the review was one of the ways the government was looking to bring down the cost of goods at the supermarket.
He said the review would examine whether elements of the code of conduct would need to be made mandatory.
“We know that when we’ve seen a reduction in the cost to supermarkets, that hasn’t been passed on in an appropriate way to consumers, and we want to make sure that happens,” he told ABC TV on Wednesday.
“Everything is on the table because we want to make sure that customers benefit.”
The review, announced in October, is expected to examine whether the supermarket industry code — which regulates the conduct of retailers and wholesalers towards suppliers — is helping improve standards of business behaviour in the sector.
It may lead the government to strengthen consumer rights.
There are growing concerns about the gap between what farmers earn and supermarket prices as the grocery giants posted billion-dollar profits in 2023.
Agriculture Minister Murray Watt said supermarkets needed to be more open about their pricing arrangements.
“At the moment, we do see supermarkets have a lot of market power when it comes to their negotiations with farmers and their other suppliers,” he told ABC Radio.
“The voluntary arrangements we’ve got in place may not be doing enough to ensure that supermarkets are being fully transparent.”
Watt said falls in the wholesale price of produce should be passed on to shoppers.
“It’s just not fair for consumers to be paying high prices for goods at supermarkets when farmers aren’t receiving good prices at the farm gate,” he said.
“It makes it very difficult for farmers to work out what kind of price they should be charging for their goods, it leaves them in a very weak bargaining position.”
Deputy opposition leader Sussan Ley said consumers needed more immediate relief at the checkout.
“I don’t think as families are pushing their supermarket trolleys around filling up for the new year, wondering about those back-to-school prices … they’re going to be reassured by a review of a code of conduct,” she told Sky News.
“This is all about bringing prices down, not reviewing what supermarkets are doing.”
The government will also release one part of the Food and Grocery Code of Conduct review and its response on Wednesday.
The supermarket giants are expected to face a grilling when Coles and Woolworths front a parliamentary inquiry into price gouging, record profits and cost-of-living pressures in the coming months.
