The Australian Competition and Consumer Commission (ACCC) has published its final report following a year-long inquiry into the country’s supermarket sector. The report includes 20 recommendations to increase competition and price transparency for consumers and suppliers. 

The ACCC found that Aldi, Coles and Woolworths have increased their average product margins over the last five financial years, particularly for branded goods in household and packaged food categories, and that they are among the most profitable supermarket businesses globally. The ACCC also found that suppliers pay a significant amount to Coles and Woolworths for promotions and ancillary services.

The final report follows an interim report released in September last year, in which the consumer watchdog found that Australian shoppers had lost trust in supermarket pricing, with more shoppers comparing prices between stores before making a purchase.

Following that report, the ACCC held a series of private and public hearings with representatives of the major supermarkets as well as key consumer and supplier groups to gain a more complete understanding of the key issues in the retail grocery sector and its associated supply chains.

“In the past 12 months the ACCC has heard from more than 20,000 consumers who responded to our consumer survey, received more than 100 public submissions, held eight supplier roundtables, reviewed tens of thousands of internal documents, conducted private hearings and 10 days of public hearings, and analysed billions of points of supermarket data,” Mick Keogh, the ACCC’s deputy chair, said.

“Based on this extensive analysis we have recommended a range of measures to improve conditions for competition in the sector and deliver better outcomes for consumers and suppliers.”

The 20 recommendations aim to make it easier for consumers to compare prices across supermarkets; enable new or smaller supermarkets to enter the market and expand at scale; improve price transparency, particularly around promotions and shrinkflation; and give fresh produce suppliers greater transparency about the weekly tendering processes supermarkets use to negotiate price and volumes with suppliers.

“There is no ‘silver bullet’ that will address all the issues we have identified in the supermarket sector, but we are confident that our recommendations will make a difference for consumers, will equip suppliers to make more informed business and investment decisions while bearing a more appropriate level of risk, and will boost competition in the sector,” Keogh said.

In a statement released on Friday morning, Coles acknowledged the release of the report and said it was reviewing the report and its recommendations in detail. 

“Over the past 18 months, we have actively participated in the ACCC’s Inquiry as well as eight other inquiries and reviews into the sector,” the statement said.

“Coles believes Australia’s grocery sector is highly competitive, is evolving rapidly, and offers consumers greater choice than ever before.”

The supermarket noted that in recent years it has not only been competing with traditional supermarkets like Woolworths and IGA but also major multinational players like Aldi, Costco, and Amazon. Coles’ market share is less than 30 per cent.

“Coles welcomes any recommendations that improve transparency for suppliers and customers but cautions against measures that will increase red tape and drive up costs. We will review all of the recommendations in detail,” the company stated.

Woolworths and Aldi Australia had not released a statement about the report at the time of this writing.

The ACCC’s 20 recommendations are:

1. Governments should consider support for community-owned stores in limited choice areas (particularly remote areas) with appropriate governance measures
2. Supermarkets should be required to publish pricing information
3. Governments should adopt measures to address planning and zoning issues
4. Supermarkets should be subject to minimum information requirements for discount price promotions, supported by record keeping obligations
5. We support the Australian Government’s proposal to consult in relation to proposed changes to the Unit Pricing Code
6. Supermarkets should be required to publish notifications when package size changes occur in a manner adverse to consumers
7. Coles and Woolworths should be required to provide members with periodic loyalty program information disclosure summaries
8. Coles and Woolworths’ loyalty program practices should be reviewed in 3 years
9. We recommend measures to strengthen complaints handling mechanisms in remote locations
10. Supermarkets should not be able to negotiate out of key minimum protections in the Food and Grocery Code
11. Harmonisation of accreditation and auditing requirements
12. Aldi, Coles and Woolworths should be required to provide fresh produce suppliers with detailed information about their supply forecasts
13. Aldi, Coles and Woolworths should be required to provide fresh produce suppliers with greater transparency about the weekly tendering processes they use to negotiate price and volumes with suppliers
14. Greater transparency about supermarkets wholesale fresh produce prices
15. Aldi, Coles and Woolworths should not be able to unilaterally reduce wholesale fresh produce prices or volumes agreed with suppliers
16. Greater transparency for growers who sell fresh produce through intermediaries
17. Suppliers of supermarket branded fresh produce to supermarkets should have earlier certainty about orders placed with them
18. Suppliers should be allowed to apply their own branding to fresh produce
19. There should be greater transparency about the rebates suppliers pay to supermarkets
20. Coles and Woolworths should be more transparent about how supplier funding contributions to their inhouse retail media services are used.