NSW Farmers has called upon the federal government to crack down on big businesses driving up the cost of groceries by abusing market power.
When the Reserve Bank of Australia lifted interest rates to an 11-year high this week, NSW Farmers Business, Economics and Trade Committee chair John Lowe said, more stress was placed on families experiencing cost of living stress. Mr Lowe said serious competition reform needed to be delivered by the federal government as part of next week’s budget.
“We know food is the second-largest household expenditure behind rent or mortgage repayments, and the Australian Bureau of Statistics reported food spending increased by 12.8 per cent in the 12 months to February 2023,” Mr Lowe said.
“But we also know the cost of groceries is increasing not just because of inflation, but because of years and years of consolidation in the food processing and retail sector.
“Where once there were many businesses in the food sector, the level of market concentration we see today has led to incredible power imbalances that are driving up the cost of food for consumers.”
Farmers had campaigned long and hard for fairness in the market, Mr Lowe said, and while the voluntary Food and Grocery Code was supposed to improve the behaviour of retailers and wholesalers towards suppliers, it had been found by the Australian Competition and Consumer Commission to have “significant shortcomings”.
“Implementing recommendations from the ACCC’s 2020 Perishable Agricultural Goods Inquiry would be an excellent starting point to bring food prices down for consumers,” Mr Lowe said.
“The entire reason the ACCC came to be in the first place was to protect the consumer, and it’s about time these recommendations were taken seriously.
“If the federal government is serious about tackling some of the cost-of-living problems facing Australian families in next week’s budget, then it needs to listen to the expert advice of the nation’s competition watchdog and make our markets fairer for everyone.”
Among the ACCC recommendations NSW Farmers wanted to see implemented were:
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Making the Food and Grocery Code mandatory with civil penalties for breaches
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An economy-wide prohibition on unfair trading practices
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An overhaul of the current merger and acquisition approval process
There also needs to be an analysis of supply chain profits, with a focus on markups and price gouging.
Date: Friday, May 5, 2023
Media Contact: Steve Mudd | 0429 011 690 |
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