The ACCC is taking legal action against Woolworths and Coles, alleging the supermarket giants breached consumer law by misleading customers. Earlier this year, Woolworths CEO Brad Banducci stepped down after walking out of an interview with Four Corners during a tough line of questioning on price gouging.
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TVTranscript
00:00There's been sort of swirling rumours over the last couple of years around the pricing
00:07tactics used by the big two supermarkets.
00:10And there's never really been any sort of hard evidence of that.
00:15And in fact, both the supermarket chains have emphatically denied any allegations of price
00:20gouging or of manipulating specials.
00:23So I think, you know, really extraordinary this morning that we wake up or we come into
00:26work this morning and we see these really huge allegations.
00:30So you know, the ACCC says that Woolworths on 266 occasions was dishonest in how it presented
00:39specials.
00:40Coles on 245 occasions was misleading or dishonest, if you like, or that's the allegation of course,
00:47on how they presented specials.
00:49And so, you know, they've given some really granular detail here, which is quite interesting.
00:54And I think it really goes to the idea of what a lot of consumers had been seeing, but
01:00couldn't really have the hard evidence for it.
01:03And I mean, there's a good example here with Oreo biscuits, everyone loves them, that for
01:08696 days, the price of Oreo biscuits was $3.50.
01:14And then the price increased to $5 for a 22 day period.
01:19And then it dropped back to $4.50.
01:23And it was billed by Woolworths on this occasion as a price drop or a discount, when in fact,
01:29you know, the basic mass tells you that it's nearly 30% higher.
01:33So they're billing something that was actually a 30% price increase as a discount.
01:39And that is clearly misleading.
01:41And that's what the ACCC are going to go very hard after.
01:45The other thing that I think is interesting here is that, you know, when we did our sort
01:49of Four Corners story earlier in the year, we tried really hard to get this data to find
01:54out, you know, base levels of prices, how much things had gone up and down.
01:58And this data was not available anywhere.
02:01And so the ACCC used its sort of compulsory powers to go in there and compel the two big
02:07supermarkets to give over this data.
02:10And you know, what they found is really, really damning.
02:13So I think this is another sort of gap in the system here is that the average consumer
02:19cannot find this data and cannot sort of form a view whether something's a special or not.
02:25So in the face of that, what can consumers do?
02:27Yeah, really difficult because the two big supermarkets control about 66% of the grocery
02:33market here in Australia.
02:35And so, you know, can they vote with their feet?
02:39It's very difficult, right?
02:40We still know that Aldi have a more limited range.
02:44The sort of independents are often more expensive as well.
02:46So you know, not a lot, really.
02:49And that's really the whole point of sort of consumer advocates and competition experts
02:54who say that we've let this situation get totally out of hand where we have, you know,
02:59this really, really powerful duopoly, which this instance shows are prepared to really
03:06do anything they like.
03:07I think the point here that's a really strong one to make is that this sort of behaviour
03:14has been consistently denied by the supermarkets.
03:17And yet when the actual evidence is presented, it becomes very clear what they've done.
03:22And just one thing I'd also say, bear in mind, this is only the first of the sort of inquiries.
03:27The ACCC is also looking into price gouging, actual price gouging, and also how they treat
03:34their suppliers.
03:35So this one we didn't really expect.
03:37We thought they might find something on the price gouging and how they treat their suppliers.
03:42So if they've found this now, I think there's more coming down the line.