Competition+-+supermarkets

Supermarkets

Is there a lack of competition in the Australian supermarket industry? The two major chains, Woolworths (Safeway) and Coles (Bilo) control up to 70 % of the grocery market and up to 50% of the fresh food market. This creates both oligopoly power in the reselling of a large range of consumables and monopsony power in the purchase of these key products from the farmers and manufacturers. In addition Metcash which is the major wholesale supplier to the supermarket has a large market share.

Every now and then there are reports by TT and ACA on the lack of competition in our supermarkets. They may triumph the arrival of a new competitor or run a story on how the supermarkets are ripping us off.

Here is an example of one such report/opinion piece by Alan Jones (AUgust 2007)

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In July 2008 the ACCC conducted an inquiry into the competitiveness of the Australian supermarket industry. The full report can be found here



A summary of their findings:



- Here is an interesting article on the price war between supermarkets []