Calls to end ‘problematic’ supermarket specials

Andrew Brown |

Consumer groups describe member-only prices at major supermarkets as unfair and inappropriate
Consumer groups describe member-only prices at major supermarkets as unfair and inappropriate

Customers are being misled and confused by “problematic” supermarket specials offered only to those who have signed up to a membership program, consumer groups have warned.

The organisation Choice told a Senate inquiry into supermarket prices that more regulation was needed on how checkout prices are presented.

Choice director Rosie Thomas said major supermarkets offering further discounts on goods only to shoppers who had signed up to the programs was one of the concerning practices.

“The membership schemes or the loyalty schemes are essentially giant data-mining practices,” she said.

“Consumers can have a wide range of reasons for not wanting to sign up, including concerns about their privacy.

“The proliferation of promotions are confusing, and in some cases, potentially being misleading.”

Ms Thomas said supermarkets employing the practice was “problematic”, and called for major players like Coles and Woolworths to provide greater information on prices to customers.

“It’s very hard to come by reliable, historical pricing data for the supermarkets,” she said.

“The lack of transparency means verifying their claims about past and future pricing can be a challenging process.

“It opens up the very real possibility of mischief in supermarket pricing.”

Ms Thomas said the consumer group also backed a proposal for court-ordered divestiture powers if supermarkets were found to have breached competition laws.

But growers have warned any attempt to break up the supermarket duopoly of Coles and Woolworths would hit regional customers the hardest.

Fresh fruit and vegetables at a supermarket
Farmers say some of the prices set by supermarkets for their produce have been static for a decade. (Mick Tsikas/AAP PHOTOS)

Michael Coote, the chief executive of vegetable peak body AUSVEG, said breaking up the major chains would not end price gouging at the checkout, with regional communities having to pay more.

“Coles and Woolworths are nearly in every corner of the state,” he said.

“Now, if we go down the path of splitting that up, we could end up in a situation where parts of our country and regional areas might not be serviced at all.

“They might be serviced by an independent, which hasn’t got the capacity to be able to buy and purchase at a fair and reasonable price, and then the consumer would end up paying more for the product.”

While there were issues about the market share of Coles and Woolworths, any divestiture powers would have to be done in a cautious way.

“We don’t want any result out of any of these current inquiries and processes that are looking into retailers to result in any unintended negative consequences for vegetable producers,” Mr Coote said.

Despite the concern, the major supermarkets had carried out “unconscionable” practices towards growers.

There were few incentives for new entrants to the market and with no improvements, more imported vegetables could line supermarket shelves, Mr Coote told the inquiry.

Michael Crisera from Fruit Growers Victoria said many working in the industry had been afraid to speak out about the market conditions experienced by growers dealing with supermarkets.

“They don’t want to be seen to be biting the hand that feeds them,” he said.

“There is a real fear of retribution commercially.

“Current codes of conduct are not working – growers are unwilling to report issues, enforcement is rare and non-compliance is widespread.

“There needs to be a strong, regulatory framework for cracking down on unethical behaviour.”

Prices offered by supermarkets to growers had not shifted in a decade, National Farmers Federation rural affairs general manager Charlotte Wundersitz told the inquiry.

Special stickers and loyalty programs
Consumer group Choice criticised supermarket ‘specials’ only for loyalty program members. (Mick Tsikas/AAP PHOTOS)

Farmers needed to be better informed about how the prices are set by the major players.

“At the end of the day, farmers need to understand how the price they’re being paid is determined, and with greater oversight and greater data and information,” Ms Wundersitz told the inquiry.

“That then gives the grower more power to be able to understand, make a decision on whether that’s the best option for them, and also have more faith in the process.”