Why supermarkets and airlines are in ACCC’s cross-hairs

Households feel they’re paying too much for groceries, farmers think they’re not being paid enough, and the regulator has vowed to find answers.

Supermarket sector competition, fair trading, consumer protection and pricing are priorities for the Australian Competition and Consumer Commission, its chair Gina Cass-Gottlieb is expected to say in a speech on Thursday.

“This new priority reflects significant price increases in food and groceries and the concerns of many Australian consumers and farmers about supermarket pricing,” she is expected to tell an event held by the Committee for Economic Development of Australia.

The watchdog is very cognisant of these concerns, Ms Cass-Gottlieb said on Wednesday in a media briefing on the commission’s 2024/25 priorities.

The Federal Government in January directed the commission to conduct a 12-month inquiry.

Claims by farmers of a raw deal from supermarkets will also be examined.

“Farmers are manifestly saying that they think they’re getting an unfair share of the profits that are made through the supply chain,” Ms Cass-Gottlieb said.

“We will look at key products from the farm gate to the supermarket shelf and look at where the margins are being made.”

The commission will be particularly interested in evidence of quicker price competition in areas with more small and independent supermarkets.

The way prices are set will also be interrogated.

Promotional discounts, potentially optimised by data collected through loyalty programs, could be misleading about value by claiming discounts from increased prices.

It could be encouraging some consumers to stock up while prices are low, while those who cannot afford to buy in bulk cop the increased price, Ms Cass-Gottlieb said.

“As compared to lower everyday prices as a result of competition, disadvantaged members of our community ... are not able to access the benefit of those prices in the same way,” she said.

Supermarkets are not the only area where consumers have recently felt they are overpaying.

“We also have a focus, which is new, on the aviation sector ... we’re conscious that there continues to be unreliability in performance, concerns about pricing,” Ms Cass-Gottlieb said.

The commission is concerned about the extent that airline profits are reinvested in capacity and crew to provide a reliable service.

“We’re most focused on where is the money going and how does that lead into the consumer proposition,” Ms Cass-Gottlieb said.

Other priorities include “greenwashing” claims about sustainability, competition in essential services such as energy and telecommunications, and improved compliance with consumer law from National Disability Insurance Scheme providers.

The consumer watchdog’s priorities are shaped by cost of living pressures, the net-zero emissions transition and poor conduct in the digital economy, Ms Cass-Gottlieb said.