Smash supermarket greedflation! – MacroBusiness
This is a good move by Albo’s dills:
Supermarkets face a fresh wave of scrutiny led by former competition minister Craig Emerson and the threat of potential price intervention via a regulatory assault reminiscent of last year’s energy market shake-up.
Claiming a willingness to “look at every option” to put downward pressure on prices, Labor will on Tuesday tell supermarket giants the government could shift from soft-touch industry-led conduct rules to harder-line arrangements.
Under fire from grumpy voters and the opposition for failing to act more aggressively on cost-of-living concerns, Labor will also announce the appointment of the respected economist and The Australian Financial Review columnist Dr Emerson to review the 2015 Food and Grocery Industry Code of Conduct.
…Data from last year shows supermarket prices are rising at a faster pace than wholesale prices, which tend to lead consumer prices by three to six months. That suggests food price inflation may moderate in coming quarters.
Damn right. Food prices are crashing worldwide and will keep doing so as input prices like fertiliser keep plunging:
Yet grocery prices are skyrocketing in Australia:
Middlemen are gouging. In Australia that includes the supermarket duopoly. Both Coles and Woolies are experiencing booms in EDITDA margins.
It has already arrived for Coles and is expected to accelerate:
Woolies is a more complex business, so any margin expansion has been delayed but is still underway:
There is not a lot of brute force that the government can bring to bear. Moral suasion in the form of brand demonisation is not entirely powerless but undoubtedly marginal.
In the long term, we need more competition—policies to bring more supermarket chains to Australia.
Zoning policies should be liberalised to enable more stores. The cost of commercial property is prohibitive. It played a major role in reversing Kaufland’s expansion plans in 2020.
Tax incentives could be used to crowd in new international investment.
But all this takes big, strategic planning and the courage to resist vested interests.
It’s much easier to appoint a crony to look tough.