mark for political populism and tabloid journalism over the years. However, the latest challenges for the supermarket industry broadly and especially Woolworths and Coles are potentially much more threatening than any previous scrutiny, either genuine or posturing.This time supermarkets are caught in a political quagmire and the repercussions of an economic and social reset. Arguably, for the first time, the supermarkets have no political cover and have become a scapegoat for cost-of-living pressures on Australian households in the glare of multiple lines of attack. Clearly, each of the five major chains, Woolworths, Coles, Aldi and Costco along with the grocery wholesaler, Metcash, have financial, legal and market analyst firepower to attempt to fend off punitive or harsh regulatory restrictions. However, it is interesting to note a vulnerability that has not been publicly discussed: three of the companies have CEOs with less than 12 months in their jobs and the other two have CEOs who are heading to the exit door. Leah Weckert, who became Coles Group CEO, and Grant Ramage, head of Metcash’s food division, took up their roles in May 2023, while Anna McGrath was appointed CEO of Aldi Australia three months later. Woolworths’ Amanda Bardwell and Costco US executive Chris Tingman are both yet to take up their CEO roles with incumbent leaders, Brad Banducci and Patrick Noone, respectively, in transition and headed to retirement. Under pressure from all sides The problem here is that the CEO cast does not have personal goodwill or political capital at a crucial time where all the major parties are offside with the supermarket industry. The Federal Labor Government is running scared about the electoral backlash of stubborn inflation and the cost-of-living pressures and is desperate to deflect all responsibility. The Coalition is now dominated by rural MPs and they remain miffed, irrationally but perhaps ideologically, by retailer support for the Voice referendum and Woolworths’ Australia Day stance. Some may disagree, but consider Liberal Opposition Leader, Peter Dutton, calling the Emerson inquiry commissioned by the Federal Government ‘mickey mouse’ and at every turn arguing that the Albanese Labor Government is weak on tackling the supermarkets. No doubt, it’s the tail wagging the dog in the Coalition, and the National Party and Queensland parliamentary cohort driving the political strategy. Then there are the ideologically and anti-business-driven Greens that have proposed legislation that would allow the Australian Competition and Consumer Commission to force large companies to be broken up and forced to divest some of their business operations. Business associations, including the Australian Retailers Association, the National Farmers Federation and the Australian Council of Trade Unions, have all rejected the proposed divestiture legislation.So too has the Albanese Government and the Liberal Party. But the National Party Leader in the Senate, Bridget McKenzie, has confirmed her party is not averse to breaking up provisions in competition laws and neither is political maverick Bob Katter. A divestiture of an integrated supermarket or other retail business derived from a previously approved merger or organic growth would be problematic and impractical. Arguably, it would also have unintended consequences such as disruption of supply chains and consumer access to product ranges, services and entitlements. The Albanese Government already has two key reports before it regarding supplier relationships, pricing and other competitive behaviour issues in the grocery sector, but is likely to delay any legislative responses until after it receives a Senate Inquiry final report scheduled for May 7. The Government will no doubt also want to consider an ACCC report on yet another inquiry into supermarket prices. The Senate Select Committee on Supermarket Prices was established by reference of the Senate on December 6 last year to inquire into and report on the price-setting practices and market power of major supermarkets. The select committee has received more than 120 submissions and has conducted public hearings that have canvased evidence from the supermarket chains and other retailers, suppliers and other stakeholders and expert witnesses. The Select Committee has also taken the Craig Emerson Inquiry Report into consideration along with a report by former ACCC Chairman, Alan Fels, that was commissioned by the union movement.Fels has been a long-term protagonist against Woolworths and Coles, arguing they use their market power unfairly in dealings with suppliers and in trading tactics against retail competitors to the detriment of consumers. A key statement by ACTU secretary Sally McManus has rejected the break-up powers for the ACCC for supermarkets but urged the establishment of a permanent prices commission. That proposal would go much further than Emerson and again seems to be an impractical and unwieldy concept and regulatory overreach. Widening the regulatory net Emerson has extraordinarily claimed that recommendations in his report will lead to lower consumer prices and higher returns for suppliers. Emerson contends this improbable outcome will largely be achieved by making the current voluntary food and grocery code of practice mandatory and introducing penalties of up to $10 million for breaches.Woolworths has already indicated it could agree to making the code mandatory provided it is expanded to other retailers such as Bunnings, Chemist Warehouse and all grocery retailers, including Costco and Amazon. The Woolworths view of how wide any regulatory net might be is a key issue on issues such as prices, supplier relationships, competitive behaviour and customer rights and entitlements.That is to say, a mandatory code or potentially, a prices commission, could extend to other non-grocery retailers. For that matter, there could be a temptation for a government to include other provisions such as industrial relations or sustainability performance measures. Whether or not the Federal Government would chance a broader agenda remains to be seen, but the price-setting practices and market power of major supermarkets are certainly facing more serious challenges than ever before. The comprehensive Senate Inquiry is examining the effect of market concentration and the exercise of corporate power on the price of food and groceries and the pattern of price setting between the two major supermarket chains. The Inquiry is also investigating rising supermarket profits and the large increase in price of essential items and the prevalence of opportunistic pricing, price mark-ups and discounts that are not discounts.The contribution of home brand products to the concentration of corporate power and the use of technology and automation to extract cost-savings from consumers and employees are also in the Inquiry terms of reference. The role of multinational food companies in price inflation is also being examined.The Select Senate Committee has been asked to identify improvements to the regulatory framework to deliver lower prices for food and groceries as well as frameworks to protect suppliers when interacting with the major supermarkets. The supermarkets lauded as heroes in the pandemic lockdowns are now the villains of cost-of-living pressures that in many instances result from government policies and charges.In current circumstances, they will be lucky if they come away this time with just a few cuts and bruises.