Government ‘Foodmap’ report shows extent of Aussie supermarket monopoly

Posted by AFN Staff Writers on 27th February 2012

A new government report has highlighted the extent to which Australia’s two major supermarket chains, Coles and Woolworths, are monopolising the retailing of food in Australia. The market position of each of these two major supermarket groups is so powerful that Australian food suppliers feel they are facing a duopsony despite the competition existing between the two supermarket groups.

The report, titled ‘Foodmap: An analysis of the Australian food supply chain’, was launched on Thursday 23 February 2012 by the Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig.

According to the report, during 2010-11, the total turnover from retail food and liquor sales was AU$130 billion. In this period, supermarkets accounted for 63 per cent of household food expenditure, 80 per cent of which is controlled by Coles and Woolworths. By contrast, specialty and convenience stores accounted for 12 per cent of sales, and eating out accounted for 25 per cent of sales.

The report identified risks for the Australian food sector, including the affects of the high Australian dollar on exports, industry consolidation and energy costs.

Launching the report, Minister Ludwig said that over the past 20 years, spending on food in Australia has increased by 13 per cent, while incomes have risen 36 per cent.

“Although food has become relatively more affordable, economic pressures have still impacted on the eating habits and expenditure patterns of households,” Minister Ludwig said.

“Of the fresh food consumed by Australians, well over 90 per cent is grown and supplied by our own farmers. As well as producing high quality, safe food for ourselves, Australia also feeds another 40 million people around the globe.”

AFGC’s renewed call for Supermarket Ombudsman

Australian Food and Grocery Council (AFGC) Chief Executive, Ms. Kate Carnell said the Government’s report provides additional reason for a Supermarket Ombudsman to be appointed to help create a “more level playing field” for primary producers and manufacturers.

“Australians and our political leaders overwhelmingly want a local, value-adding food and grocery manufacturing sector – it’s an essential industry that we can’t live without,” Ms Carnell added.

The Foodmap report can be found by clicking here.