The Federal Government announced last week it has directed ACCC to conduct the 12-month inquiry, the first of its kind since 2008, to investigate the competitiveness of retail prices and allegations of price gouging in the supermarket sector.
Prime minister, Anthony Albanese, said when farmers are selling their products for less, supermarkets should be charging less.
"That's why the ACCC will use its significant powers to probe the difference between the price paid at the farm gate, and the prices people pay at the check-out," he said.
ACCC welcomed the announcement and its chair, Gina Cass-Gottlieb, acknowledged grocery price have become a major concern for the millions of Australians experiencing cost of living pressures and for farmers.
"When it comes to fresh produce, we understand that many farmers are concerned about weak correlation between the price they receive for their produce and the price consumers pay at the checkout," Cass-Gottlieb said.
"We will use our full range of legal powers to conduct a detailed examination of the supermarket sector, and where we identify problems or opportunities for improvement, we will carefully consider what recommendations we can make to Government."
The ACCC will consider a range of factors including competition in the industry and how it has change since 2008, the pricing practices of supermarkets, the competitiveness of small and independent retailers, including those in regional and remote areas, factors influencing prices along the supply chain, including the difference between farmgate and supermarket prices, and any impediments to competitive pricing along the supply chain.
ACCC deputy chair, Mick Keogh, said "our inquiry will examine the nature of the current competitive environment between supermarkets, as well as the barriers to greater competition and new entry in the sector.
"We believe we are well placed to conduct this broad-ranging inquiry and will bring to bear our expertise in competition, consumer law, agriculture and the supermarket sector in particular."
In a statement on the ACCC inquiry, Woolworths Group chief executive office, Brad Banducci, acknowledged the government decision and welcomed "the opportunity to assist the ACCC with its inquiry.
"We know many Australian families are doing it tough and looking for relief at the checkout," he said.
"Food inflation has continued to moderate in recent months and we expect this to continue throughout 2024."
National Farmers' Federation (NFF) president, David Jochinke, said the ACCC inquiry is good news for farmers who have long called for greater transparency from the big retailers.
"It's appropriate the ACCC lead this inquiry, using its powers to compel information to form a clear picture of paddock to plate pricing, and whether that's fair for both farmers and consumers," he said.
"We need the ongoing commitment of Government to act on any outcomes from this inquiry. We've seen past reports collect dust on shelves in Canberra.
"Reports and recommendations don't make our food system fairer. We need sustained political leadership and action.
"While we await the ACCC's findings, we call on the Government to maintain its momentum on broader competition reforms, which will create a fairer policy environment for farmers."
The ACCC expects to publish an issues paper in February seeking views on the key issues it will consider in this inquiry. An interim report will be provided to the Australian Government later this year, and the final report is due to be provided early next year.
For updates, visit the Supermarket sector inquiry 2024-25.
