Grocery Pricing

The Hon. R.A. SIMMS (16:26): I move:

1. That a select committee be established to inquire and report on grocery pricing in South Australia with particular reference to:

(a) the trends in grocery pricing in South Australia, compared to other states in Australia and internationally;

(b) the disparities in grocery pricing between metropolitan and regional areas;

(c) the impact of high grocery prices on consumers, particularly for those on low incomes;

(d) the relationship between wholesale prices paid to farmers and the retail price paid by consumers;

(e) the prevalence of food insecurity in South Australia;

(f) the prevalence of price gouging practices and anti-competitive behaviour among grocery retailers and the impact on consumers;

(g) factors contributing to high grocery prices;

(h) potential opportunities for further regulation of grocery retailers and opportunities for state government intervention; and

(i) any other related matters.

2. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

In moving for this inquiry, the Greens recognise the significant cost-of-living crisis that we are facing at the moment, and the impact that this is having on some of the most vulnerable people in our state. Since September of last year, we have seen a 4.8 per cent increase in food prices nationally and, in the previous year, there was a 9 per cent increase in food prices nationally. I understand that here in South Australia over the last five years, grocery prices have increased by 20 per cent.

Examples of some of the price increases over the last five years include the price of wholemeal sliced bread, which has gone up from $1.80 to $2.70; white sliced bread has gone up from $1.50 to $2.70; peanut butter was $5.70 and is now $6.40; white sugar has gone up from $1.79 to $2.20; and instant coffee has gone up from $7.50 to $11.50. Meanwhile, you have the large supermarkets making an absolute motza. Coles made a $1.1 billion profit last financial year; that is an increase of 4.8 per cent. Woolworths made a $1.6 billion profit, up by 4.6 per cent.

A report by UBS, an investment bank, has shown that prices have increased at Coles and Woolworths by 9.6 per cent between May 2022 and May 2023. I note that this is a figure that is disputed by Coles, but this is the assessment of the UBS. Let's consider the other cost-of-living pressures that people are facing. Indeed, Foodbank's 2023 Hunger Report found that:

in the last year, 3.7 million Australian households experienced moderate to severe food insecurity;

48 per cent of the general population now feels anxious or struggles to consistently access food;

77 per cent of those households experiencing food insecurity did so for the first time this year;

56 per cent of food-insecure households did not get help in the past year; and

high living expenses is the most common reason given for food insecurity.

The ABS data shows that households are cutting back on clothes, shoes, furnishing and household equipment due to cost-of-living pressures, and South Australian household spending has increased by 3.7 per cent.

We are seeing the cost of everything going up. The cost of electricity is skyrocketing, the cost of fuel is skyrocketing, interest rates are going up and up and up, rents are going up and up and up, and meanwhile we have big corporations making record profits. How can it be that we have South Australians who will struggle to put food on the table this Christmas while we have Coles and Woolies and the big food retailers making an absolute motza? How can that be right? Surely we have to do something. That is why the Greens are calling for this inquiry, because it is time for this parliament to step up and hold these big corporations to account and to see what can be done.

It is not right that we have families that will struggle to put food on the table this Christmas while Coles and Woolies make record profits—that is not right. We need to do something about it. I plan to bring this to a vote in the new year, and I urge all members of parliament to get on board and let's see what we can do.

New South Wales has had an inquiry into food prices. Victoria announced an inquiry into food prices earlier this week, and that was led by my Greens colleagues in that state. It is a key priority for us in the Greens, but it should be a key priority for everybody in this parliament, particularly as we head into the Christmas period.

The Hon. F. PANGALLO (16:31): I rise to support the motion moved by the Hon. Rob Simms. As we have heard, cost of living is the single biggest challenge facing Australians today. The cost of food, fresh fruit, vegetables, meat, poultry, fish and grocery items has risen dramatically since the pandemic. It is being attributed to many factors from the war in the Ukraine to floods, bushfires and other emergencies. So, too, the cost of production from the farm gate, where primary producers have had to wear increased transport costs, along with those associated with production, including soaring energy bills and of course labour costs.

It has a domino effect on manufacturing by the time they hit the shelves, and it then impacts on the retailers with their margins. Supermarket prices for goods have jumped anywhere between 20 and 40 per cent, where the supermarkets are maximising their profits and the profits of the biggest and dominant retailers, Woolworths and Coles, but are these increases justified? Are retailers price gouging? Are primary producers and manufacturers getting short-changed and having their profit margins slashed?

Woolworths has 37 per cent share, while Coles has about 28 per cent, with Aldi and other independents making up the rest. The duopoly has enormous market power, and they can dictate their terms to the suppliers to get a prominent place on their shelves, which comes at a premium cost. In 2023, Woolworths reported a 5 per cent increase in food sales to $50 billion, while Coles' revenue was $38 billion.

Are their suppliers receiving a fair go? Are consumers paying too much? Many suppliers I have spoken to over the course of my time here say that their hands are being tied by the contracts they sign. They are virtually told that it is our way or the highway, it is their price or the highway. These areas I am sure will be explored by the Hon. Mr Simms with the committee. I applaud the initiative and look forward to being a member.

The topic is also one that has been undertaken by one of my parliamentary interns, Mahkaila Sansom, from Flinders University. She has just completed an excellent 31-page report, titled 'From Paddock to Plate: who profits the most?'

Mahkaila concludes that while consumers and growers might be paying and receiving fair prices in isolation, they are not doing as well as the supermarket and grocery stores in the broader economic context. She recommends that innovative and radical policy options be explored, and pointed out that there has been no action despite the outcry around the country. She rightly says that market regulation needs to be driven at the federal level rather than at the state level. Finally, she says support is needed for the regions and the foodbowl areas through policies that address education, infrastructure and energy. I commend the motion.

Debate adjourned on motion of Hon. I.K. Hunter.