Supermarket profits soar: Is price gouging at play?

SARAH Mansfield, Greens Member for Western Victoria, along with the Australian Greens have set their sights on the rising cost of groceries, accusing the two major supermarkets of price gouging.

After receiving support from the state government, a parliamentary inquiry investigating the factors contributing to the ongoing food affordability crisis will go ahead next year.

The rapidly rising cost of groceries in Coles and Woolworths supermarkets is likely to be a key focus of the inquiry to determine if these increased costs are unreasonable.

Both supermarkets have come under fire recently after each reported profits in excess of $1 billion for the last financial year.

“Recent research from the Australia Institute reveals that 56 per cent of price increases above inflation were company profits,” Dr Mansfield said.

“We can’t forget that this is occurring at the expense of everyday shoppers struggling to put food on the table and primary producers, such as our dairy industry, who have to fight to duopoly tooth and nail over fair prices for their milk.”

Meanwhile, rates of financial stress continue to rise across the region.

According to data compiled by the Give Where You Live Foundation for its 2023 Food for Thought research report, the proportion of local residents struggling financially has quadrupled between 2020 and 2023.

“Many people across Geelong, the Bellarine and the Surf Coast are having to choose between putting food on the table or accessing routine healthcare,” Dr Mansfield said.

“It’s an impossible choice and one that people should not have to make.

“Food security is essential for health and wellbeing, and everyone should have access to affordable, nutritious food.”

At the same time, food relief organisations have been struggling to keep up with the unprecedented demand for their services.

The Geelong Food Relief Centre, alone, has reported a 239 per cent increase in demand over the past few years.

Coles and Woolworths have, however, rejected the suggestion that price increases in their supermarkets amount to price gouging.

A Woolworths spokesperson said the company was “acutely aware” of the cost-of-living pressures impacting Australian families.

They said Woolworths was “doing more every day to help customers spend less” and pointed to the supermarket’s weekly specials, low price program, price drop campaigns and member pricing.

A Coles spokesperson said the having a profitable business allowed the company to “continue to serve Australians, invest in our stores, employ the 120,000 team members we employ, pay taxes in Australia, pay dividends to our hundreds of thousands of mum and dad shareholders and ensure long-term sustainable relationships with our suppliers”.

But, they said, the supermarket was “also not immune to the increased cost of doing business” and cited increasing energy, construction, logistics and packaging prices.

“Our suppliers are also challenged with many of the same increases and, rightly so, we have experienced a greater volume of supplier price increase requests which we have to balance.”