The Australian Competition and Consumer Commission (ACCC), in its final report for the 2024-25 supermarkets inquiry, has urged supermarket giants Coles Group (ASX:COL), Woolworths Group (ASX:WOW), and ALDI to increase transparency, enhance competition, and create fairer conditions for suppliers and consumers, according to a Friday statement by the regulator.
The report outlined 20 recommendations to address rising prices, market concentration, and supplier challenges, per the statement.
The regulator found that over the past five years, Coles, Woolworths, and ALDI have raised product margins, particularly on branded goods, while suppliers continue to pay significant fees for promotions and services, the statement added.
The sector remains highly concentrated, with Coles and Woolworths dominating the market and ALDI providing limited price competition.
To foster competition, the ACCC recommends that supermarkets publish prices online and offer dynamic pricing via application programming interfaces (APIs) to support price comparison tools, the regulator said.
The commission also calls for simplified planning and zoning laws to ease market entry and expansion for new players.
The ACCC urges stronger oversight of supermarket mergers under new laws to prevent Coles and Woolworths from consolidating market power through acquisitions.
Suppliers should receive greater transparency in tendering processes and seasonal forecasts, with supermarkets prohibited from unilaterally reducing prices or volumes unless in force majeure events, the regulator added.
For consumers, the ACCC calls for clearer pricing on promotions, better transparency in loyalty programs, and mandatory notifications for "shrinkflation," where product sizes shrink without price adjustments.
In remote areas, the ACCC recommends support for community-owned stores, mandatory in-store price displays, and improved complaints handling.
In an emailed statement to MT Newswires, a Coles spokesperson said it is currently reviewing the report and its recommendations in detail adding that it cautions against measures that will increase red tape and drive up costs.
Meanwhile, a Woolworths Group spokesperson said that the company would share a statement later.
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