The ACCC launching legal action against Coles and Woolworths today for misleading consumers reinforces the findings of Australia Institute and Centre for Future Work research, that showed inflation is higher because of big businesses price gouging.
Key Points:
- The Australian Competition and Consumer Commission (ACCC) has launched legal action against Coles and Woolworths for misleading consumers through discount pricing claims at a time when inflation was at its highest.
- The ACCC alleges the misconduct involved 266 products for Woolworths at different times across 20 months, and 245 products for Coles at different times across 15 months.
- This covers the period when inflation rose to a peak of 7.8% at the end of December 2022 and led to the Reserve Bank raising interest rates 13 times in 19 months.
"Today's announcement reinforces our research that has shown the inflation that led to the Reserve Bank raising interest rates was caused overwhelmingly by companies abusing market power to raise prices," said Greg Jericho, Chief Economist at the Australia Institute.
"The ACCC does the best they can, but the drop in competition over recent decades has shown that the current system is failing us.
"The ACCC clearly needs stronger powers, including a competition and prices commission and divestiture powers to break up uncompetitive industries.
"Australia is dominated by uncompetitive markets. The threat of divestiture would lower prices, better service and more innovation and growth in productivity."
"We need better monitoring of prices in Australia, especially in industries that lack competition. A prices commission would ensure that Australian consumers are not being ripped off by big business."
