ACCC Calls for Sweeping Supermarket Reforms as Coles and Woolworths Named Among World's Most Profitable

Inside AusPol

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ACCC Calls for Sweeping Supermarket Reforms as Coles and Woolworths Named Among World's Most Profitable

Miko Santos

Mar 22, 2025

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The Australian Competition and Consumer Commission (ACCC) has delivered a landmark report calling for sweeping reforms to address the dominance of major supermarket chains, naming Coles and Woolworths among the most profitable grocers in the world. The comprehensive investigation, which analyzed billions of data points and included 20,000 consumer responses, concluded that the current market structure is harming both consumers and suppliers.

Supermarket Dominance Under Scrutiny

ACCC Deputy Commissioner Mick Keogh explained the complexity of assessing supermarket pricing practices: "Supermarkets typically carry anywhere between 25 and 30,000 different product lines and the margins on those vary anything from 10% for some of the essentials through to 40 or 50% for some of the luxury items."

Rather than attempting to directly regulate margins, Keogh stated the ACCC "focused on finding ways to improve competition because that's the best preventative to make sure margins aren't excessive."

The 441-page report makes 20 recommendations, including mandatory online price disclosure and enhanced protections for suppliers. It highlighted that ALDI's market share of just 9% after more than two decades in Australia demonstrates the significant barriers new entrants face.

Political Battle Lines Drawn

The report has intensified the political debate over supermarket regulation, with the Coalition and Greens forming an unusual alliance in calling for "big stick" legislation that would allow the government to forcibly break up supermarket chains.

Opposition Leader Peter Dutton placed blame on both the supermarkets and the government's energy policies: "We've been very clear about our policy, and that is that we're on the side of mums and dads who are paying 30% more for their groceries under this government. And it's not all the fault of Coles and Woolies, it's the fault of Chris Bowen and Anthony Albanese as well."

Dutton cited rising electricity costs throughout the supply chain, including a New South Wales business facing a $480,000 annual increase in electricity bills. "The farm electricity bill is going up under Labor. The cold storage electricity bill has gone up under Labor and all of that is being passed on," he stated.

The Opposition Leader emphasized his party's commitment to consumers: "We've been very clear if consumers are being ripped off, we will not tolerate it. I think it's long past that we make excuses for these supermarkets."

However, Treasurer Jim Chalmers continues to resist divestiture powers, arguing the "risks outweigh the benefits" and noting that such measures were not recommended in the ACCC report. Labor has accepted the ACCC's 20 recommendations in principle and says it is taking "very significant steps" to crack down on supermarkets.

International Students Exonerated in Rental Crisis

In separate findings that challenge another prominent political narrative, a groundbreaking study by researchers at the University of South Australia has found no link between international student numbers and rising rent costs.

Professor Michael Mu, who led the research, detailed their methodology: "We collected data from reliable sources including the Australian Bureau of Statistics, Department of Home Affairs, and Department of Education. We purposefully selected variables including international student numbers, rental costs, rental vacancy rates, and rental inflation."

The extensive analysis covered 70 time points between 2017 and 2024 at both national and capital city levels. Surprisingly, the research found a potential negative correlation after COVID: "At the national level, what we found was international student numbers had a negative prediction of the rental cost. Our model would predict every increase of 10,000 international student numbers would see a $2 drop in weekly rental cost," Mu explained.

The professor was unequivocal in his conclusion: "Statistically, we had little evidence to say that there is a relationship between international student numbers and the rising rental cost. It's just unjustified for people to argue that [international students cause rental increases]."

Addressing concerns about university bias in the research, Mu stated: "We were very aware of the position. Both Hannah [Soong, co-researcher] and I are part of the university, and we understand that universities have been supporting and welcoming international students for a long time. However, as researchers, both of us are empiricists, which means all we are looking at is data and evidence."

Political Implications

Shadow Education Minister Sarah Henderson maintained that Labor's "complete failure to manage international student numbers has created an immigration mess" and indicated plans to further limit international student numbers, directly challenging the study's findings.

The Australian universities most vulnerable to cuts in international student numbers are the elite Group of Eight, which rely heavily on this revenue to fund research. Group of Eight chief executive Vicki Thomson warned: "What we'll start to see in particular is a real stretch on our research effort," noting that international education is Australia's third-largest export industry.

Industry Response

Both Woolworths and Coles have acknowledged the ACCC report and promised to "carefully consider" its findings while maintaining their view that the Australian grocery sector remains "highly competitive."

The Choice chief executive officer, Ashley de Silva, supported the ACCC's findings, stating: "The ACCC's report confirms this is a highly concentrated market, with the major supermarkets appearing to be among the most profitable in the world during a cost of living crisis."

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ACCC Calls for Sweeping Supermarket Reforms as Coles and Woolworths Named Among World's Most Profitable

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