Supermarkets in Australia Approved to Coordinate on Supplies

Supermarkets in Australia Approved to Coordinate on Supplies

The ACCC temporarily allowed supermarkets in Australia to work together as store shelves have run on empty with supplies.

The Australian Competition and Consumer Commission granted the application on Monday, allowing rival superstores to coordinate in setting retail prices for their goods. Usually, economists will call this action collusion – an illegal practise wherein retailers conspire in fixing market prices. However, the anxiety brought by the coronavirus pandemic had shoppers stockpiling, and panic-buying in recent weeks. So ACCC may flip the law this time.

This change only applies to supermarkets under the Independent Grocery Alliance (IGA) brand such as Woolworths. Aldi Sud, Metcash, and Coles. The interim decision, according to ACCC, was aimed to guarantee the availability of supply and the “fair and equitable distribution” of goods to consumers in Australia. The agency wants to ensure that fresh food, household items, and groceries are still available for those who are susceptible to the disease and those residing in remote and rural places.

Rod Sims, the ACCC Chairman, noted an upsurge in consumer demand because of panic-buying. He said superstores in the country had seen an unprecedented rise in demand for groceries both in-store and online in recent weeks. The situation resulted in product shortages and disruption of delivery services.

Senior Media Advisor of CHOICE, Jonathan Brown, agreed with the ACCC’s decision, calling it beneficial for consumers. However, he stated that with strict monitoring, supermarkets helping each other get their products on shelves would be positive.

However, shoppers expressed their dismay, stating the panic over the coronavirus has led supermarkets in Australia to price gouging aside from stock shortages.

Costco has refused to answer questions regarding alleged price gouging in its stores. On the other hand, a Coles representative declared no such thing in their stores.

Reports of shoppers buying fresh vegetables at premium prices have circulated across the country. Australians, also, began stockpiling healthy foods such as broccoli, beans, capsicums, potatoes, and zucchini, which shoppers point as the cause of the sudden price hike.

Shaun Lindhe, the National Manager for Communications in AUSVEG, stated he has yet to receive reports from their 5,000 vegetable farmers of price gouging by retailers or producers. He points out that price hikes in vegetables were complicated and could be a result of drought during the summer months.

Furthermore, Lindhe said the immediate rise in demand for vegetables had brought costs for labour and shipping higher. Hence, changes in store prices may become apparent.

On Tuesday, Woolworths CEO and Managing Director Brad Banducci reported to ASX a strong sales growth across their supermarkets in Australia. He said shoppers have consumed and stocked pantries at home more than ever. Therefore, it may send a “short-term shock” to supermarket chains because of the unprecedented demand in consumer goods.

Banducci said food supply chains might have gained the confidence of customers. He expressed confidence in the retail industry to supply the needs of consumers in both Australia and New Zealand. He also reported how shopping behaviour has been in moderation over the weekend. He shared how shoppers were beginning to respect their product limits, understanding the necessity to leave products for other members of their local community.

Woolworths announced a plan to support the vulnerable members of the community later this week. However, their online pick-up delivery service remained temporarily suspended because of high demand.

Woolworths also announced ‘changes’ in all of its supermarkets in Australia. These changes will include implementing the social distancing rule, adding plexiglass screens on registers, as well as applying measures for hygiene and cleaning.

Coles, on the other hand, said on Tuesday that it extended dedicated window hours for the elderly, disabled, and workers in healthcare and emergency services.

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