Go Albo!
Bunnings has slammed a push by Woolworths for the code governing supplier relationships to be expanded to cover rivals Amazon, Costco and Chemist Warehouse, saying it would do little to lower prices and imposed a one-size-fits-all approach on unrelated business operations.
Coles and Woolworths signed on to plans to make the supermarket code of conduct mandatory on Monday, as Labor backed proposals from former minister Craig Emerson to impose penalties of up to $5.2 billion for chains found to be abusing their power.
Woolworths, the country’s largest private employer, went further than the review, calling for Amazon and Costco, along with Bunnings and Chemist Warehouse, to be subject to the code.
One can imagine the intensity of lobbying going on behind the scenes. More:
Craig Woolford, a retail analyst with MST Marquee, said lower price inflation was already occurring in supermarkets because input costs were falling. But it was crucial that a mandatory code did not add red tape and that resolutions were swift when a problem arose.
“It’s important that it doesn’t lead to longer and more protracted processes, because that would add costs and lead to higher prices,” Mr Woolford said.
Wages are stalling, and the food price index rolled over long ago:
So we should see food inflation slowing more:
However, all I have seen from the Emerson Report is that supermarkets will face rising regulatory costs, which they will pass on. Great scrutiny of supply deals to pressure prices higher which will be passed on. And, if there are breaches and fines, same same.
We still have the ACCC’s second major report, which will shed more light on the consumer side.
But the fractured and piecemeal policy process is not shaping well. Regulation and gaps in it are all opening up higher costs and/or the opportunity to pass them on.
Neither are the reforms so far structural. The government is busy mocking notions like break-up powers on behalf of corporations. Hopefully, the ACCC will add more information on how to boost competition.
At this stage, the undertaking looks like a political exercise designed to seize cudos from the supermarkets as inflation normalises.
A kind of Albo re-election tax that will cost households one way or another.
