The Australian Competition and Consumer Commission (ACCC) has issued 20 recommendations following the conclusion of its extensive inquiry into the country’s supermarket sector, highlighting concerns about the market dominance of major players like Coles, Woolworths, and ALDI. The final report, published on March 21, 2025, suggests a series of reforms aimed at increasing competition, improving transparency, and ensuring better outcomes for both consumers and suppliers.
The inquiry, which involved over 20,000 consumer responses, more than 100 public submissions, and extensive data analysis, found that Coles and Woolworths are among the most profitable supermarket businesses globally, with their average product margins increasing over the past five years. Despite their market power, the ACCC noted that aspects of the supermarket sector are not functioning as well as they should, leading to higher prices and less favorable conditions for suppliers.
ACCC Deputy Chair Mick Keogh emphasized that while there is no single solution to the issues identified, the proposed reforms would improve competition in the long run. “Our recommendations aim to equip suppliers with better tools for making informed business decisions and ensure that consumers are given clearer, more accessible pricing information,” he said.
Key recommendations include:
- Price Transparency and Consumer Convenience: The ACCC suggests that supermarkets, particularly Coles, Woolworths, and ALDI, should publish their prices online, with Coles and Woolworths also providing dynamic price information to third-party comparison tools. This move is intended to make it easier for consumers to compare prices and encourage supermarkets to compete on price.
- Easing Barriers for New Entrants: The report highlights the challenges new or smaller supermarkets face when attempting to enter the market, particularly due to restrictive planning and zoning laws. The ACCC calls for simplified and harmonized regulations to allow easier establishment of new supermarkets, with a focus on small-scale local entrants.
- Reforming the Merger Review Process: With Coles and Woolworths controlling significant portions of the market, the ACCC stresses the need for enhanced scrutiny of acquisitions. New merger reform laws will allow for more robust oversight of supermarket acquisitions to prevent anti-competitive practices.
- Reducing Consumer Confusion: The ACCC is recommending greater transparency regarding pricing, promotions, and loyalty programs to reduce consumer confusion. This includes mandatory notifications for price increases, such as shrinkflation, where a product’s size decreases but its price remains the same or increases.
- Improving Conditions in Remote Areas: Consumers in remote areas often face higher prices and reduced service quality due to limited competition. The ACCC recommends mandatory price displays in all supermarkets and increased government support for community-run stores to boost competition in these areas.
- Enhanced Transparency for Fresh Produce Suppliers: The report also addresses the power imbalance between supermarkets and fresh produce suppliers, urging ALDI, Coles, and Woolworths to provide greater transparency about their weekly tendering processes. This would help suppliers make more informed decisions and reduce the risk of unfair price reductions or demand changes.
These reforms aim to improve both the competitive landscape and the fairness of trading conditions for suppliers, while also providing consumers with clearer, more accurate information to make better purchasing decisions.
The ACCC’s recommendations are expected to lead to significant changes in the supermarket sector, but their implementation will require collaboration between industry stakeholders and government agencies.
