A farming expert has slammed a sneaky supermarket trick allowing major food giants to pass off normal business practices as “Christmas gifts” amid a dire price gouging crisis rocking the nation.
Brendan O’Keeffe’s comments on the shocking practice come on the fifth day of a union-backed inquiry into corporate price gouging in Australia.
The Sydney inquiry has received dozens of submissions from Aussies struggling to afford basic essential foods, including one NSW resident revealing he was resorting to eating “one meal a day”.
Another, from Gosford, said his family had resorted to sacrificing their children’s after-school activities and hobbies, taking up extra shifts just to afford the grocery bill.
The Inquiry into Price Gouging and Unfair Pricing Practices was commissioned by the Australian Council of Trade Unions (ACTU).
It is aiming to identify the “scale of price gouging practices being deployed by large businesses and to understand the effects this is having on everyday Australians”.
Allan Fels, the former chair of the Australian Competition and Consumer Commission, is overseeing the inquiry.
Mr O’Keeffe, an economist with NSW Farmers Association, told the inquiry on Friday that value was not spread across the supply chain.
He said supermarkets would increase their prices “straight away” during supply shortages.
“But the opposite doesn’t happen when there’s a large increase in supply,” Mr O’Keeffe said.
“They don’t pass that on very quickly or in full.”
Mr O’Keeffe said lamb prices had been decreasing for six months but pointed to a recent announcement by Woolworths that lamb prices would be decreased as a “Christmas gift”.
“It really shows their attitude,” he said.
“When a normal business practice in a competitive market, which should not be in the news … they’re allowed to position it as a Christmas gift to consumers.”
A 75 per cent plunge in mutton prices has sparked chaos in the sheep farming industry, leading to farmers drastically trying to get rid of their animals.
In submissions to the inquiry, residents have spoken about their struggle to afford basic necessities like vegetables and meat.
Of the 752 submissions, 33 per cent are from NSW.
Julie, from Paddington, said she was cutting back on grocery shopping to afford her electricity bill.
Joy, from Eastwood, said she couldn’t bring home simple treats for her kids like ice cream and had resorted to cutting back on fruits and vegetables.
During his submissions, Mr O’Keeffe said it was a struggle to obtain accurate data to measure household food budgets.
“There’s been no more data from the government on household spending since 2015-16,” he said.
“We’re in a cost-of-living crisis and we don’t have detailed information on household spending.”
He also spoke about the diary industry, pointing to deregulation in the 1980s that led to large growth margins.
He said farmers became “too exposed” to market forces in the 2010s, causing many to exit the industry.
This left milk production at their lowest levels since 1991.
“Prices for dairy in one quarter were up to 15 per cent increases … double what inflation was,” Mr O’Keeffe said.
“If you do have too much anti-competitive behaviour, or let supermarkets and processors go hell for leather, you get a situation where consumers benefit for a short while, but in the long term you’re decimating the industry.”
The inquiry continues.
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