Supermarket bosses to face tough questions during Senate inquiry

The first bosses of Australia’s biggest supermarkets are getting ready to be interrogated over rising grocery prices and price gouging before a final showdown that will see the heads of Woolworths and Coles front angry senators.

On Thursday, the chief executive of the German-headquartered Aldi chain Anna McGrath and Metcash Limited boss Grant Ramage will appear before a Senate inquiry into supermarket prices.

Dan Murphy’s and BWS owner Endeavour Group will also face questions during Thursday’s session.

The senate committee is holding an inquiry into allegations of price gouging, high profits and poor conduct towards suppliers.

Farmer lobby groups and vegetable growers have told previous hearings that grocery retail giants were abusing their market power to set unfair prices and short-change food suppliers.

In its submission, Aldi revealed that it recorded a 4 per cent increase in customers in 2023 but argued that the increase was due to its offering of low-prices “year round”, rather than a rotation of mark-ups and discounts used in other supermarkets.

“Aldi’s prices are more stable than at some of the other supermarkets,” its submission read. “Permanently low prices across the majority of the Aldi range means more clarity and certainty for customers as well as more savings year-round for shoppers.”

Meanwhile, Metcash, which owns supermarket chain IGA and hardware seller Mitre 10, is likely to differentiate itself from the major chains by emphasising its ownership of family-owned supermarkets and smaller buyer power.

“Metcash in seeking to secure the best terms possible for our retailers has some influence over supermarket pricing of fresh produce and meat, this is relatively minor compared to integrated supermarket chains which operate across a much wider span of the fresh food value chain from primary producer to shopper,” its submission said.

Coles boss Leah Weckert and outgoing Woolworths counterpart Brad Banducci will both front the inquiry next Tuesday, after both chains reported annual profits of more than $1bn last year, while household spending on food reached record highs.

Greens senator Nick McKim, who chairs the committee, said the pair should expect to face some tough questions next week.

“They’ll have to answer for price gouging shoppers and putting the squeeze on farmers,” Senator McKim said.

“They’ll have to explain how they are raking in billions in profits while millions of Australians are struggling to put food on the table.”

Supermarket chains will also face a 12-month inquiry by the nation’s competition regulator, the ACCC, which will give its assessment of pricing practices in an interim report due in August.

They will also face tougher rules when dealing with suppliers and customers if proposed changes to the food and grocery code come through later this year.

Both Coles and Woolworths have denied allegations of price gouging and claim that higher production costs have led to higher store prices.