Woolworths, Coles push back on price gouging proposal, union claims of ‘taking the piss’

With the election campaign now underway, Labor has taken a shot at Australia’s supermarket giants, proposing new legislation that will crack down on price gouging.

Price-gouging allegations have been surrounding supermarket titans Coles and Woolworths since the beginning of early 2022 – morphing into a massive talking point that curated disdain within the Australian public towards these massive businesses.

Fast forward to now, and Anthony Albanese has kicked off his 2025 federal election campaign, taking aim at the supermarket giants – proposing new laws that would make it illegal for the likes of Woolworths and Coles to price-gouge their consumers.

According to the ABC, Albanese plans to implement a taskforce to advise on an “excessive pricing regime”, which will be overseen by the Australian Competition and Consumer Commission (ACCC).

The Australian Retail Association (ARA), which represents both Woolworths and Coles, labelled the proposal as a “distraction” from the broader business policies Australians deserve. Speaking on the investigations and reviews by the ACCC, ARA chief industry affairs officer Fleur Brown noted that no substantial evidence of price-gouging was discovered.

“Eight taxpayer-funded inquiries have failed to find any evidence of supermarket price gouging,” Brown said.

“The ACCC’s findings clearly state that grocery inflation has been driven higher by the cost of wages, energy and fuel. Yet, instead of hearing how the government will address these issues, which significantly affect all Australian retailers and consumers, we unfortunately see more taxpayer-funded deflection.

“The ARA calls on the government to focus on policies that drive down the cost of doing business in Australia, which will have a direct impact on grocery prices and the cost of living for Australian families. We need measures that reduce red tape, increase productivity or drive down costs.”

According to Brown, tensions around food pricing within supermarkets often arise during a cost-of-living crisis – absolving Coles and Woolworths of being accountable for the rise in prices.

“Tensions about food pricing will always arise during a cost-of-living crisis – as they have globally. Yet despite the enormous challenges faced by the industry, food inflation has remained relatively stable, and household spending on food has declined as a proportion of total expenses,” Brown said.

“Grocery inflation in Australia is lower than many OECD countries. In recent years, Coles and Woolworths net profit margin has remained stable at less than three cents in the dollar.

“It’s crucial we have a sensible discussion around the realities of running a large business in a market like Australia – a country perpetually and uniquely challenged by scale issues with a relatively small population and a vast geography. We need big business in Australia, and we need our home-grown businesses to thrive – and that means acknowledging the mechanics of large-scale operations.”

A Woolworths Group spokesperson speaking to HR Leader in line with the ARA’s description of the events reiterated that no evidence of price gouging was found by the ACCC.

“Woolworths provided thousands of documents, millions of data points to the ACCC, and several senior executives participated in public hearings as part of a 12-month-long inquiry into the supermarket sector,” the spokesperson said.

“Following this year-long inquiry into supermarkets, the final report found no evidence of price gouging … As we said, following the release of the ACCC report, where no evidence of price gouging was found, we have already taken action on many of the report’s recommendations to improve the experience and transparency for customers and suppliers.”

A Coles spokesperson echoed this sentiment, turning the conversation towards tackling “the real factors” instead of fixating on price gouging.

“What’s needed are measures that tackle the real factors driving higher grocery prices, which are rising costs such as energy, fuel, labour, insurance, production, freight and distribution,” the Coles spokesperson said.

This statement was slammed by the Australian Council of Trade Unions (ACTU), which – in a media release – claimed the supermarket giants were “taking the piss” by “blaming workers for higher prices”.

ACTU secretary Sally McManus labelled the comments from Coles and Woolworths regarding Albanese’s proposal as “shameless”.

“It is shameless that Coles and Woolworths are wanting to blame the modest pay rises of their lower-paid workers for jacking up prices. Now, they want to cut penalty rates for these same workers,” McManus said.

“Coles and Woolworths lead the world with their profit margins and have shown themselves to care not one bit when their customers have been under pressure. Of course, they will oppose laws to stop price gouging.

“They had plenty of chances to ‘do the right thing’ and hoped they could dodge their way through it and blame everyone but their own business practices.”

“The last bit of spin and deflection is to blame their own workers, whose full-time wage is around $50,000 a year. Really, they should apologise and take responsibility for their decisions. We all know that even if they cut labour costs, they do not pass this on to customers – how much did prices drop when they brought in automatic checkouts?”

The opposition party led by Peter Dutton also mentioned the possibility of reforms relating to price gouging if the Coalition government were to be successful in the upcoming federal election.

“Where supermarkets act against the interest of consumers, we will act, I promise you,” Dutton said.

The Greens party, in a media release, proposed stronger consequences for non-abiding supermarkets compared to Albanese’s plans, pushing for fines of $50 million for the likes of Coles and Woolworths.

“Our policy would hit Coles and Woolies with $50 million fines if they’re caught price gouging, and Labor should commit to this at the very least,” said Greens economic justice spokesperson Senator Nick McKim.

“And we’d give courts the power to force the big supermarkets to actually lower their prices,” McKim said.

“Without serious penalties and strong enforcement powers, the supermarket duopoly will continue to act with impunity. If the fines are not large enough, the supermarket corporations will simply absorb them into their massive profits and continue to price gouge their shoppers.”

It’s becoming apparent that regardless of the political allegiance or ideology, the Australian public yearns for accountability and supervision of these supermarket giants – regardless of whether the reviews discovered substantial evidence or not.

This is a thought process that founder and managing IR consultant Troy Gread touched on when reviewing the 17-day strike committed by Woolworths warehouse workers – which received staunch support from the Australian public.

“I think what we’re seeing is a bit of a union movement, but even more broadly speaking, a bit of people power [movement] off the back of some media blow-up in relation to these big corporations like Woolworths and Coles,” Gread said.

“The court of public opinion is certainly playing out and influencing what people want but more so what these employees want as far as wages go. When they read about allegations of price gouging … it can sway the court of public opinion … it’s an interesting piece in time, that’s for sure.”