For immediate use
November 12 2009
Grocery price hike is a warning shot to motorists
VACC, the peak Automotive Industry body in Victoria, is appealing to motorists to sit
up and take notice of the recent publicity surrounding the increase in supermarket
grocery prices.
According to Associate Professor Frank Zumbo, a competition and consumer law
expert at the University of New South Wales, “food prices in Australia have increased
41.3 percent since the start of 2000 – resulting in Australian families being forced to
pay some of the fastest rising food prices in the developed world”.
“Coles and Woolworths control around 80 percent of the grocery market and the lack
of competition in this sector has allowed them to drive prices up. This trend is also
already happening in the retail fuel industry. And it could get worse for consumers
and Independent Service Station owners, once Woolworths enters the hardware
sector as Woolworths would seek to link hardware purchases with their petrol
discount dockets,” Professor Zumbo said.
“VACC is alarmed that a lack of Government intervention, together with weak
competition laws, has paved the way for big supermarkets to dominate. If Mobil
leaves the retail fuel market, then the supply of fuel will be even further concentrated
and competition lessened” VACC Executive Director, David Purchase, said.
“The Independent Service Station owners do their best to compete with Coles and
Woolworths and their fuel retailer partners, Caltex and Shell. But it is an uphill battle
and a fight they take on with one hand tied behind their back. Independent Service
Station owners do not have access to the same wholesale prices as the
supermarkets and they do not benefit from the same price discounts along the supply
chain.
“Many Independent Service Stations trade at a loss, but they continue to provide a
service. However, if they were to cease trading, we suspect Coles and Woolworths
would seize their chance and tie up the market, making it impossible for any small
businesses to return or start up.
“VACC believes it is in the public interest for Independent Service Station operators
to be afforded an environment in which they can compete, otherwise consumers will
end up paying higher fuel prices in the future.
“In the meantime, VACC continues to oppose predatory pricing, creeping
acquisitions, restrictive leases and geographic price discrimination through its
Service Station and Convenience Store Division,” Mr Purchase said.
Ends.
NEWS 
