SUBJECTS: Food and Grocery Code, CHOICE report, Supermarket Competition
MURRAY JONES (HOST): The Assistant Minister for Competition, Charities and Treasury, Assistant Minister for Employment as well, Dr Andrew Leigh, joins me this morning. Good morning, Andrew. How are you?
ANDREW LEIGH: Very well, Murray, great to be with you.
JONES: Nice to talk to you. Let's talk a little bit more about some of the concerns that have come out, obviously, when it comes to the cost of living, the cost for consumers and them feeling like they've been misled by some of the biggest players when it comes to supermarkets. But they're also very aware of the impact on the employees and the impact on some of the suppliers as well, particularly when it comes to some of the contracting arrangements. Let's talk about some of the issues that have come out in the short term, particularly in relation to people getting screwed all over, except for the main players, the shareholders, it seems.
LEIGH: Yeah, I mean, the ACCC report is a really important one. It's the first deep dive into the supermarket sector that the competition watchdog has done in 16 years. It attracted more responses to its survey than any other report that the competition watchdog has done. It raises issues around the market power of the large suppliers, around the transparency of prices. It makes clear that the two majors have 67% of the market, a very high market share and higher than in many other countries. And also notes that over the last five years, food and grocery prices have risen faster than prices on average in the economy.
JONES: I understand the Prime Minister has actually weighed quite deeply into this. You know, the ACCC has got certain powers, but what powers do we have as a government? Because, you know, when it comes to private business, it generally is a standoff position, but I should imagine, you're taking the bull by the horns and actually need to step in and actually do more, with respect to the regulatory framework.
LEIGH: Absolutely. So, when we came to office, we raised the penalties for anti-competitive conduct, and that means that the action brought by the ACCC against Coles and Woolworths, if they're found to be liable, they'll face higher penalties as a result of Labor's increase to the penalties. Last week we introduced the draft of the new mandatory food and grocery code of conduct, which governs the supermarket's relationship with their suppliers. And that's about ensuring that farmers get a fair deal. And we announced the second round of the CHOICE quarterly grocery price monitoring report, which ensures that families get a fair deal by finding the best place to shop.
JONES: Now, when it comes to, I guess, the stranglehold on the market, there's reports that some of the big players have actually got a stranglehold on some of the key locations when it comes to new supermarkets down the track in the future. Busting that up and giving more opportunity to the smaller independents, should be important moving forward as well.
LEIGH: Yeah, this is the so-called issue of land banking crosses state and territory and federal. But the report notes that Woolworths has interests in about 110 different sites for supermarket use, Coles in 42 sites. And it looks at the importance of making sure that there's a quick rezoning and development planning approvals for anyone taking on the major supermarkets. We're engaging in national competition policy with states and territories and one of the issues that could potentially look at, is the issues around planning and zoning, which are critical to a competitive supermarket sector that delivers for consumers.
JONES: Just the straightforward smoke and mirrors, over the last couple of years, grocery prices have said to have risen about 20%, which is fairly significant. And obviously the smoke and mirrors that's been employed by a lot of the big players is tricking consumers to a degree, but I guess there's a wake up. But what do we do when people continue because of convenience to go to these big two, though? How can we change that behaviour?
LEIGH: One of the things we're aiming to do through the CHOICE price monitoring report is to make clear where people can get the best deal. So, choice has sent its teams of shadow shoppers around the country looking at the prices across a whole lot of different supermarket chains. And that makes really clear that you can save an awful lot by going to Aldi. The price comparison for Queensland, the average basket of goods in Aldi $50.52, in Woolworths $68.45, in Coles $66.30 including specials. So, Aldi with the gold, Coles with the silver, Woolworths with the bronze.
JONES: Ok. And, you know, I know they're certainly fairly tough when it comes to security. Even if you take a photo of the zucchinis, sometimes you'll get jumped on, you know, by security. So, obviously some of these big players are very guarded about their position because they're making big profits despite the fact that they're employees, the consumers and of course, their suppliers are the ones that are really paying. Great to talk to you this morning. It's an important subject moving forward, and particularly when it comes to the cost of living. This morning, my special guest, Assistant Minister for Competition, Charities and Treasury, also Assistant Minister for Employment, Dr Andrew Leigh. Have a great day. Cheers.
LEIGH: Thanks, Murray. Take care.