Last Tuesday I had Andy Schmulow the ACP Candidate for the Senate in NSW in the upcoming election, on my live show. Dr Schmulow left no stone unturned as he methodically called out the power of big business from the Banks, Airlines, Big Consulting Firms and Supermarkets, across Australia who are systematically gouging ordinary households and businesses across the country, protected by the current political system.
Its corruption on a grand scale, which is why our big banks, airlines, gas companies and supermarkets are making super high profits at our expense, and many shareholders by the way in these companies are overseas, so we lose out there too.
And in an interesting happenstance, the ACCC on Friday released their massive 441 report on the Big Supermarkets. It is a thorough examination of the extraordinary number of moving pieces in the grocery sector, and the legitimate concerns of different players at different stages though the value chain.
The ACCC says that Grocery prices in Australia have been increasing rapidly over the last 5 financial years. Most of those increases are attributable to increases in the cost of doing business across the economy, including particularly production costs for suppliers, which has increased supermarkets’ input costs. However, ALDI, Coles and Woolworths have increased their product and EBIT margins during this time, meaning that at least some of the grocery price increases have resulted in additional profits for ALDI, Coles and Woolworths.
They say Coles’ and Woolworths’ apparent ability to increase retail margins for packaged grocery products by more than is necessary to accommodate a wholesale price increase indicates they have – and sometimes exercise – a level of market power in retail markets.
But despite the furore over rising prices, the ACCC noted there’s nothing illegal about businesses making a profit. Woolworths recorded a profit of $739 million in the first half of the current financial year, with Coles reporting a $576 million profit during the same period.
The ACCC says there’s no “silver bullet” to address all of the issues identified in its full report but has recommended a suite of potential legislative and policy reforms to address areas that aren’t working well — particularly when it comes to competition in the industry.
At the heart of the final report of the Australian Competition and Consumer Commission’s supermarket inquiry is a simple truth: the horse has bolted. They suggest things cannot change. But I say, rubbish, time for new broom, to stop the gouging… but that needs real political intent. Cue Andy!
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