Greg Jericho
Chief Economist

BCA chief executive Bran Black: “Well, I think it’s very clear from the ACCC report that there is no price gouging. It goes back to the point that I was just making.”

This line is being spouted by everyone from Coles and Woolworths to conservative media, but the reason the ACCC found no price gouging is it wasn’t looking to see if there was any! Why wouldn’t they do that? Well because it is not illegal to price gouge! The ACCC has no power to look at prices, and so it doesn’t!

As the ACCC report states:

We have not sought to determine whether the prices or margins of ALDI, Coles, Metcash (or its banner stores) and Woolworths are excessive. Having or exercising market power, or charging high prices, or obtaining high margins, is not prohibited by the CCA.”

Supermarkets (or anyone else) is free to charge as much as they like – so long as they are not doing so in cahoots with another “competitor”. So if Coles can get away with raising price well above what they need to maintain a decent profit, they are free to do so, so long as they have not spoken to Woolworth s and both agreed to do it. Of course it is clear the grocery market is so dominated by Coles and Woolworths that they don’t need to collude. They know what is best for the both of them. This is why for example they take it in turns having products on “special” Coles will have Coke on special one week and Pepsi the next, and Woolworths will do the opposite.

The entire point of a price taskforce is about making price gouging illegal and empowering a body to examine prices. This is something we have been calling for and is a necessary measure given the duopoly and profit margins of the Coles and Woolworths is such that they have lost the right to demand they be treated like other companies. Food is a vital good – and the actions of Coles and Woolworths demand greater regulatory oversight: