The Business Council of Australia says the Federal Government’s announcement of new regulation on supermarkets is not supported by evidence and risks increasing costs.
BCA Chief Executive Bran Black said the Australian Competition and Consumer Commission (ACCC) year-long inquiry found no evidence of supermarkets engaging in excessive pricing.
“We all want lower prices for Australians, but regulation should be based on evidence. The ACCC did not find that supermarkets are driving inflation, and it also found grocery prices being pushed up by the rising costs of getting goods onto shelves — including energy, transport and insurance costs,” Mr Black said.
October ABS data reinforces this point — headline CPI inflation was 3.8 per cent, while food and non-alcoholic beverage inflation was 3.2 per cent.
These outcomes reflect broader cost increases across energy, freight, labour and production rather than retailer pricing practices.
Mr Black said supermarket profit margins remain modest and stable, with Coles reporting around 2.4 per cent and Woolworths around 2.0 per cent in FY25 — levels inconsistent with claims of excessive pricing.
“The ACCC identified higher energy, freight, labour, insurance and production costs as the key pressures on grocery prices across the entire supply chain. Adding further pricing regulation risks introducing complexity and cost at a time when Australians need the system working as efficiently as possible.”
The BCA’s submission warns that the proposed regulations could lead to significant direct and indirect compliance costs, distort competition and — contrary to the Government’s intent — ultimately risk higher prices for consumers.
Mr Black said that with productivity growth and business investment weak, adding new regulatory burdens is not the right approach.
“If Australia wants lower prices and better outcomes for consumers, we need to focus on reducing unnecessary regulation and addressing the underlying cost pressures across supply chains — not increasing the regulatory burden without evidence that doing so will deliver benefits.”