Competition and Consumer (Price Inquiry—Supermarkets) Direction 2024

Administered by Department of the Treasury

Legislation au F2024L00132 In force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by authority of the Treasurer

Competition and Consumer Act 2010

Competition and Consumer (Price Inquiry –Supermarkets) Direction 2024

Section 95H of the Competition and Consumer Act 2010 (the Act) provides that the Minister may require the Australian Competition and Consumer Commission (ACCC) to hold an inquiry into a specified matter or matters.

The Competition and Consumer (Price Inquiry–Supermarkets) Direction 2024 (the Direction) is made under subsection 95H(1) of the Act. The Direction requires the ACCC to hold a price inquiry into the markets for the supply of groceries.

The inquiry offers valuable transparency around Australia’s supermarket business sector and the related supply chain, including the pricing practices of suppliers, wholesalers, and retailers of groceries.

Part 1 of the Direction provides the machinery provisions of the instrument, including the definitions.

Part 2 of the Direction provides the terms of reference for the inquiry and guidance on the matters the ACCC is to take into consideration in holding the inquiry. The ACCC must have particular regard to the structure of markets for the supply of groceries, including competition at the supplier, wholesaler and retailer levels, the interactions between these levels, the position of small and independent retailers, and the impact of technological change on the markets. The inquiry must also consider the price-setting approaches of suppliers, wholesalers and retailers, and factors affecting the price of inputs along the supply chain for groceries. As part of this, the ACCC must examine any difference between the prices paid by, and prices charged by, different participants in the markets. This ensures that the ACCC considers the prices of groceries along the supply chain – from the prices paid to farmers (also known as farmgate), to the prices paid by intermediaries such as processors, producers, transporters, to the prices paid by consumers at supermarkets. Finally, the ACCC must have regard to the non-price aspects of competition in the markets for groceries, including the impact of loyalty programs and discounts offered by retailers for future purchases of groceries or other goods or services.

The ACCC must provide an interim report to the Treasurer by no later than 31 August 2024 and a final report to the Treasurer by no later than 28 February 2025.

In accordance with section 17 of the Legislation Act 2003, the ACCC has been consulted on the terms of the Direction.

The Direction is a legislative instrument for the purposes of the Legislation Act 2003. In accordance with item 2 of the table in section 9 and item 3 of the table in section 11 of the Legislation (Exemptions and Other Matters) Regulation 2015, the instrument is not disallowable and does not sunset as it is a direction by a Minister to a person or body. It is appropriate that this instrument is not disallowable as it is a Ministerial direction, and therefore executive control is intended. Similarly, the direction is intended to remain in place until the inquiry is completed or unless and until revoked by the Treasurer, and therefore it is appropriate that it not sunset.

Details of the Direction are set out in Attachment A.

A statement of Compatibility with Human Rights is at Attachment B.

The Direction commences on the day after the instrument is registered.

The Office of Impact Analysis (OIA) has been consulted (OIA ref: OIA24-06442) and agreed that an Impact Analysis is not required.

ATTACHMENT A

Details of the Competition and Consumer (Price Inquiry—Supermarkets) Direction 2024

Section 1–Name

This section provides that the name of the Direction is the Competition and Consumer (Price Inquiry–Supermarkets) Direction 2024 (the Direction).

Section 2–Commencement

Section 2 provides that Parts 1 and 2 of the Direction commence on the day after it is registered on the Federal Register of Legislation.

Section 3–Authority

Section 3 provides that the Direction is made under the Competition and Consumer Act 2010 (the Act).

Section 4–Definitions

Section 4 provides definitions of expressions used in the Direction.

A number of terms used in this instrument have the meaning given by Schedule 1 to the Competition and Consumer (Industry Codes—Food and Grocery) Regulation 2015 (Food and Grocery Code of Conduct).

This instrument extends the meaning of groceries given by the Food and Grocery Code of Conduct to also include items that are to be processed into, or used in the manufacture of, groceries.

Section 5–Commission to hold an inquiry

Section 5 directs the ACCC to hold an inquiry into the markets for the supply of groceries.

Section 5 clarifies that the inquiry is separate to the Government’s review of the Food and Grocery Code of Conduct which commenced on 3 October 2023. However, the ACCC may consider the operation or scope of the Food and Grocery Code of Conduct if necessary, in this inquiry.

This direction is given under subsection 95H(1) of the Act.

Section 6–Directions on matters to be taken into consideration in the inquiry

Section 6 directs the ACCC to have particular regard to certain matters in holding the inquiry.

The ACCC must have particular regard to the structure of grocery markets, including competition at the supplier, wholesaler and retailer levels, interactions between these levels, the position of small and independent retailers, and the impact of technological change on the markets.

The inquiry must also consider the price-setting approaches of suppliers, wholesalers and retailers, including the use of data analytics.

The ACCC must also have regard to factors affecting the price of inputs along the supply chain for groceries. As part of this, the ACCC must examine any difference between the prices paid by, and prices charged by, different participants in the market. This ensures that the ACCC considers the prices of groceries along the supply chain – from the prices paid to farmers to the prices paid by consumers.

Finally, the ACCC must have regard to the non-price aspects of competition in the markets for groceries, including the impact of loyalty programs and discounts offered by retailers for future purchases of groceries or other goods or services.

This direction is given under subsection 95J(6) of the Act.

Section 7–Directions as to holding of the inquiry

Section 7 directs the ACCC to give the Treasurer an interim report on the inquiry by 31 August 2024.

This direction is given under subsection 95J(6) of the Act.

Section 8–Period for completing the inquiry

Section 8 directs the ACCC to give the Treasurer a final report on the inquiry by 28 February 2025.

This direction is given under subsection 95K(1) of the Act.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Competition and Consumer (Price Inquiry–Supermarket) Direction 2024

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Section 95H of the Competition and Consumer Act 2010 provides that the Minister may require the Australian Competition and Consumer Commission (ACCC) to hold an inquiry into a specified matter or matters.

The Competition and Consumer (Price Inquiry–Supermarkets) Direction 2024 (the Direction) is a direction to the Chairperson of the ACCC to hold a price inquiry into groceries.

The Direction sets out the terms of reference for the inquiry. The ACCC must provide an interim report to the Treasurer by no later than 31 August 2024 and a final report to the Treasurer by no later than 28 February 2025.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Competition and Consumer (Price Inquiry – Supermarkets) Direction 2024 was enacted under section 95H of the Competition and Consumer Act 2010, aiming to address the need for greater transparency and understanding of the supermarket business sector and the grocery supply chain in Australia. This Direction mandates the Australian Competition and Consumer Commission (ACCC) to conduct a comprehensive price inquiry into the markets for the supply of groceries, focusing on various aspects of market structure, pricing practices, and the competitive environment. This inquiry is intended to provide insights into the interactions between suppliers, wholesalers, and retailers, the position of small and independent retailers, and the influence of technological changes on the market. The policy objective behind this Direction is to ensure that the ACCC examines the full spectrum of pricing practices, from the farmgate prices to those paid by consumers, and to consider non-price factors such as loyalty programs and discounts. The ACCC is required to submit an interim report by 31 August 2024 and a final report by 28 February 2025, providing the Treasurer with detailed findings and recommendations.

Scope and Application

The Competition and Consumer (Price Inquiry – Supermarkets) Direction 2024, made under section 95H of the Competition and Consumer Act 2010, mandates the Australian Competition and Consumer Commission (ACCC) to conduct a comprehensive price inquiry into the grocery supply markets. This inquiry is intended to provide transparency and insight into the supermarket business sector, encompassing the pricing practices of suppliers, wholesalers, and retailers of groceries. The Direction applies specifically to the ACCC, which is tasked with examining the structure of grocery markets, including competition at various levels, the position of small and independent retailers, and the impact of technological advancements on these markets. Additionally, the inquiry must consider price-setting approaches and the influence of non-price competition aspects such as loyalty programs and discounts. The ACCC is required to submit an interim report to the Treasurer by 31 August 2024 and a final report by 28 February 2025. The Direction does not specify any exclusions, exemptions, or thresholds, and it extends to the entire Commonwealth of Australia, ensuring a national scope for the inquiry.

Key Provisions

The Competition and Consumer (Price Inquiry – Supermarkets) Direction 2024 (the Direction) requires the Australian Competition and Consumer Commission (ACCC) to hold an inquiry into the markets for the supply of groceries. This inquiry is mandated under Section 95H of the Competition and Consumer Act 2010, which allows the Minister to direct the ACCC to investigate specific matters. Section 5 of the Direction explicitly directs the ACCC to conduct this inquiry, while Section 6 outlines the specific considerations that must be taken into account during the inquiry. The inquiry must examine the structure of grocery markets, including competition at the supplier, wholesaler, and retailer levels, interactions between these levels, the position of small and independent retailers, and the impact of technological change on the markets. Additionally, the inquiry must consider the price-setting approaches of suppliers, wholesalers, and retailers, including the use of data analytics, and factors affecting the price of inputs along the supply chain for groceries. The ACCC must also examine any differences between the prices paid by and the prices charged by different participants in the market, ensuring a comprehensive understanding of pricing practices from farmgate to consumer. Finally, the inquiry must consider non-price aspects of competition in the grocery markets, including the impact of loyalty programs and discounts offered by retailers for future purchases of groceries or other goods or services. The Direction imposes specific obligations on the ACCC. The ACCC is required to provide an interim report to the Treasurer by no later than 31 August 2024, as stipulated in Section 7. This interim report must outline the initial findings and progress of the inquiry. Subsequently, the ACCC must submit a final report to the Treasurer by no later than 28 February 2025, as directed in Section 8. These deadlines are critical to ensure timely insights into the grocery supply markets and to allow for informed policy decisions based on the inquiry’s findings. Furthermore, the ACCC must ensure that its inquiry considers the comprehensive set of factors outlined in Section 6, ensuring a thorough examination of the grocery supply chain and its competitive dynamics. There are no specific offences, penalties, or civil/criminal consequences outlined in the Direction for breach of its provisions. The Direction is a directive under the Competition and Consumer Act 2010, which means it does not create new criminal or civil offences. Instead, it directs the ACCC to undertake a specific inquiry and report on its findings. However, failure to comply with the direction could potentially lead to broader legal or administrative consequences under the Competition and Consumer Act 2010 or other relevant legislation. The Direction is not a disallowable instrument and does not sunset, indicating that it is intended to remain in effect until the inquiry is completed or revoked by the Treasurer. This underscores the importance of the ACCC adhering to the terms and timelines set out in the Direction to ensure the successful completion of the inquiry.

Area of Law: Competition Law; Consumer Law
Instrument: Direction
Concepts: Definitions & Interpretation; Reporting & Disclosure Obligations; Enforcement Powers

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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