Supermarkets 'ripped off ordinary people': Allan Fels
Too much power, suspect pricing, and loopholes in government policy. A damning new report confirms that some of Australia's largest companies have contributed to high inflation through a variety of dodgy practices.
While households battled soaring grocery costs last year, the two supermarket giants Coles and Woolies raked in the cash, both recording profits in excess of $1 billion in 2023.
But an investigation by the Australian Council of Trade Unions (ACTU) shows the supermarkets are far from alone when it comes to squeezing consumers.
The report, compiled by Professor Allan Fels, former head of the ACCC, found some banks, airlines, and energy retailers are among the conga line of corporations employing "pricing practices that rip off ordinary people".
Fels' report lays bare the remarkable price hikes that consumers had to wear for key goods and services between March 2021 and September 2023.
The price of fuel jumped 45%, electricity rose more than 22.3%, and prices for essential groceries skyrocketed by over 20%.
According to the report, three main factors have allowed some of our biggest corporations to price gouge consumers:
- Excess power over customers, supply chains, and workers.
- The use of dodgy price practices such as "excuse-flation", where general inflation is used to camouflage higher prices without justification.
- A lack of competition or regulation in certain sectors.
ACTU Secretary Sally McManus, says the report confirms "what working people suspected" - that some big businesses have actually added to high inflation.
"This needs to be reined in," she urges.
McManus adds, "The gaming of the system in the wholesale energy market is particularly concerning. Action here could have an immediate effect on our cost of living."
In his address to the National Press Club, Professor Fels acknowledged that a significant part of the cost-of-living crisis has been caused by companies taking advantage of their market power, and relying on gaps in government policy to "squeeze consumers, and often suppliers, to breaking point".
He says, "Reform to curb this is urgent."
The report includes 35 recommendations for the Government to consider, which could help swing the pricing pendulum back in consumers' favour.
For tips on navigating grocery shopping during high inflation, pick up the February issue of Money or order yours online.
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