Coles, Woolworths bosses set for Senate showdown

Andrew Brown and Kat Wong |

The heads of Coles and Woolworths will front a Senate inquiry into price gouging.
The heads of Coles and Woolworths will front a Senate inquiry into price gouging.

The heads of Australia’s largest supermarkets are in for a parliamentary grilling at a Senate inquiry examining price-gouging at the checkout.

Outgoing Woolworths chief executive Brad Banducci and Coles chief executive Leah Weckert will be witnesses at the parliamentary hearing on April 16.

The inquiry had been examining allegations of price inflation by major supermarkets, along with the relationship between grocery chains and primary producers.

The inquiry’s chair, Greens senator Nick McKim, said the supermarket heads won’t be spared tough questions..

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

Senator Nick McKim.
Senator Nick McKim will lead the questioning of the Woolworths and Coles bosses. (Lukas Coch/AAP PHOTOS)

Mr Banducci’s appearance comes after he announced his resignation from Woolworths in February after nine years at the helm, and will step away in October.

Woolworths has called for retail giants Amazon and Costco to also be subjected to a mandatory food and grocery code of conduct.

An interim review into the code recommended the guidelines be made mandatory for supermarkets with yearly revenues exceeding $5 billion – which includes Coles, Woolworths and ALDI – and for any breaches to be met with up to $10 million in fines.

The code, which is aimed at improving standards of business behaviour in the food and grocery sector, has been proposed as a potential solution to prevent alleged price gouging and to reduce checkout prices.

While Woolworths is already a signatory to the voluntary code and supports making it compulsory, the company believes more retailers should be subject to its terms.

“The code should apply to all major retailers operating in Australia, including global retail giants such as Amazon and Costco, who have global revenues many times the size of Australian supermarkets,” a Woolworths spokesperson said.

Hardware retailer Bunnings and pharmacy Chemist Warehouse, which compete in grocery categories like household cleaning goods and personal care, should also fall under the code, Woolworths argued.

Coles, Woolworths and IGA owners Metcash all said they would consider the detail of the interim report.

An employee is seen working in a Bunnings hardware store
Bunnings and Chemist Warehouse also compete with the major grocery chains on some products. (Dave Hunt/AAP PHOTOS)

An Amazon spokesperson said the company was “pleased to play a role in driving competition in the general retail sector to the benefit of all Australians”.

Federal Nationals MP Bridget McKenzie said Woolworths had a point about which retailers were captured by the code.

“We’ve got large multinationals in the supermarket ring who aren’t captured,” she told Nine’s Today program on Tuesday.

“So I’d like to see this expanded over time.”

Review leader author Craig Emerson agreed with Senator McKenzie.

“Woolworths, I think, makes a good point, and that is the code to be extended should be expanded to cover rivals Amazon, Costco and even Chemist Warehouse,” he told Nine.

But ultimately, the Nationals and the Liberals wanted to see divestiture powers in competition laws in the future, Senator McKenzie said.

An employee stocking up a fridge in a new Woolworths
Woolworths says larger suppliers are tough price negotiators who can withhold supply of products. (Dan Peled/AAP PHOTOS)

Opposition Leader Peter Dutton said such powers needed to be examined.

“I want to see healthy competition so that consumers can get the best price possible,” he told ABC Radio.

“Where you’ve got Coles or Woolies who have tied up a particular suburb, or a particular region, to the exclusion of the other providers, then I think it is appropriate that you look at the divestiture power.”

Mr Emerson has argued a mandatory code is a more effective way of cracking down on the major supermarkets.

AAP