Doorstop, Mural Hall

A joint media release with
Senator Dean Smith
Shadow Assistant Minister for Competition, Charities and Treasury

11 October 2024

JANE HUME: Well, good afternoon, everyone. I was desperately hoping to be able to tell you today why the cost of a packet of Tim Tams is cheaper in the UK than it is in Australia. We asked both Coles and Woolworths these questions, but neither of us could give you the answer, unfortunately. But it is true, this packet of Tim Tams costs $4.85 in London, but it costs $6 in Sydney, $6 in Melbourne, $6 in Cairns. The two supermarkets said these are questions for Arnotts to answer. But of course, when we speak to the big food processors, they say it's the supermarkets that are pushing up their margins. We will get to the bottom of the anti-competitive behavior within supermarkets. We will get to the bottom of the price rises that are affecting ordinary Australians as this cost of living crisis continues to roll on.

But in the meantime, the cost of living inquiry, of which my colleague, Dean Smith and I attended today, will report now, do its final report in November. This inquiry was put together at the beginning of this term in Parliament because the Coalition realised that the cost of living was going to be the number one issue for ordinary Australians, and indeed, it has been proven so. Our concern is that the Labor Government has taken its eye off the ball, that has the wrong priorities, and it hasn't tackled the root causes of the cost of living crisis, which of course, is inflation. Pushing prices further and further up. We've had more than 1200 responses to our cost of living survey. As part of this Committee, we've received hundreds and hundreds of submissions, and this is the 21st hearing that we have had into almost every sector of the economy, whether it be energy, small business, manufacturing, supermarkets, airlines, all of these sectors have been covered.

Today, we heard from Coles and Woolworths, this is the second time that they have appeared, that they've seen dramatic changes in consumer behavior over the last 18 months or so. They've seen now 70% of working Australians who are now not just shopping around for better deals, but actively looking for value by going to more than one supermarket when they do their shopping in a week. But they'll go to the discount stores first. before they then go to one of the big brand chains. This is a significant shift in consumer behavior which is dramatically affecting particularly those who are also suffering from mortgage stress.

The smaller supermarkets, the independent grocers, told us that they're seeing their margins continually squeezed. And particularly in the industrial relations reforms that are pushing up wages without corresponding productivity increases and increasing energy prices are really making it harder to keep their doors open. The President of the Master Grocers Association told us that of the 22 stores he owns, three have had to shut down in the last 12 months, and another was experiencing energy price rises of $6,000 a month, and this is a building that has solar panels already. You can see why some of these smaller grocers that are providing competition in a sector that desperately needs it are being pushed aside by decisions that this government is actively making.

And Coles told us that, of course, the big issue here is inflation, and this government has failed to get inflation down and under control in the two and a half years that it has been in Government. The decisions that this Government made have actually kept inflation higher for longer. That's kept interest rates higher for longer, and Australians are paying the price. I'll turn over to my colleague Dean Smith to talk about some of the things that we heard today.

DEAN SMITH: Thank you. With just 10 weeks to Christmas, very disappointing news for Australian families as they begin their Christmas shop and their summer holiday preparation. Quite revealing today that the supermarkets proprietors in Woolworths and Coles couldn't put a dollar value in terms of the reductions that consumers can expect to see from the Government's various competition initiatives.

More than that, the Treasury itself had not and could not put a dollar figure on how prices would come down and by how much for Australian consumers as a result of the various Government initiatives announced in the last few weeks. More than that, I think Australians should not expect there to be any significant legislative or regulatory reform until the next parliament, based on the advice that we heard from the ACCC and Treasury officials today.

Australian families have been living with cost of living challenges for two and a half years. The government has not dealt with these issues with a keen sense of urgency. In fact, consultation around the unit pricing code, which was recommended by the ACCC in February this year to the Senate supermarkets inquiry, only on the 2nd of October did the Prime Minister choose to make an announcement about consultation. So this is very, very disappointing news as Australians head into Christmas prepare for their Christmas shop, and, of course, their celebrations over the summer period.

JANE HUME: Happy to take any questions you may have or share a Tim Tam with you.

JOURNALIST: We can do that afterwards. Coles and Woolworths effectively today, don't blame us, blame our multinational suppliers. Who do you think’s right? Is it the multinational suppliers behind the price rises, or is it the big supermarkets?

JANE HUME: Interestingly, we had some of those multinational suppliers appear in front of the Cost of Living Committee just a few months ago, Mondelez and also Nestle. Now, they told us that one of the great price drivers for them was an increased cost In packaging. And indeed that came out in evidence today. I think it was Woolworths that said that even though they've seen fresh food prices come down, that actually see processed and packaged goods go up. And there are around twelve and a half thousand items that they could identify had gone up just in the last six months. That's of real concern. Now, getting to the bottom of what it is that's pushing up prices always seems to come down to the same thing. When inflation is high, it affects all businesses along the supply chain, and that should be a concern to this Government. Getting inflation under control should be the number one priority is something they have failed to do.

JOURNALIST: So just to clarify, then you think that the supermarkets are just passing on their increased costs. You don't think they're adding any more?

JANE HUME: Well, that's up to the ACCC to determine what it is that supermarkets are doing. We know that their margins have been maintained even throughout a cost of living crisis. We heard some evidence, not at this hearing, but in another hearing, that they are increasingly giving food away to the charities sector, particularly things like food bank, because the demand has increased so much. But that's an unsustainable business model. We want to see prices come down at the source, rather than putting a band aid over the problem.

JOURNALIST: What story do the Tim Tams tell?

JANE HUME: Well, interestingly, I can’t understand why it is that supermarkets in the UK can afford to sell Tim Tams at a lower price than Australian supermarkets, where we know Tim Tams are in hard supply, they're essentially an essential. That's a real concern. So getting to the bottom of why it is that they cost so much more here, potentially in a supermarket in Sydney, only meters away from where these products are manufactured, compared to 17,000 kilometers away in the UK.

JOURNALIST: Could there be an argument that they're trying to standardise the cost? I just checked the IGA in Alice Springs only charges about $6.50 for Tim Tams when they're not on special. Could it be argued that they're just kind of doing an average for the whole country so it's not as location specific? We know that the NT has some of the highest prices of groceries.

JANE HUME: Well, these aren't Australian supermarkets in the UK. This is Tesco. This is Waitrose. And yet the prices there are cheaper than they are here, and that's a real concern, considering how far away they are. What we want to understand here is that make sure that the supermarkets are doing the right thing. That's why we see that there should be a not a voluntary code of conduct, but a compulsory code of conduct. We want to make sure the supermarkets are dealing with their supply chain appropriately. That's why we want to put a commissioner specifically in the ACCC to make sure that they can deal with complaints anonymously, if necessary, from suppliers, to make sure that they're getting a fair deal. And it's why we've put in that the Coalition have committed to those, those last resort methods to make sure that supermarkets are held to account for anti-competitive behavior by having a divestiture power if court ordered, and that's fundamentally important to make sure that supermarkets are held accountable.

JOURNALIST: Are the two terms transported to UK from Australia, or are they actually produced in the UK?

JANE HUME: We checked that, we checked that. And yes, they are, in fact, manufactured here. They're manufactured in North Strathfield, just west of Sydney, and they go all the way to the UK, 17,000 kilometers, and then they are cheaper than they are here.

JOURNALIST: Senator, you've been involved in efforts to try and improve Parliament's workplace culture. Richard Marles' Chief of Staff said that after she raised the bullying allegations, she was given some counselling, but there were threats to cut that off when she engaged her local lawyer to put her case. The Parliamentary Support Service engaged high price lawyers including (inaudible) law firm. Do you think that that was an appropriate approach for them to take. And separately, do you think the Prime Minister's Office has questions to answer about their handling of this? And do you think Richard Marles has further questions to answer?

JANE HUME: I find it very awkward answering these questions while I'm holding a packet of Tim Tams, so I'm just going to put those down. What I would say is that there were some really concerning allegations that were raised this week. Parliamentary workplace culture is something that we've been speaking about for a considerable period of time. And in fact, the Coalition took the bull by the horns on this one back in 2021 by establishing, first the Foster Review and then the Jenkins Review and putting in place structures within our Parliament, within our workplace to make sure that we are all held to account for our behavior in here. For anybody that does have a complaint, that does have a concern about the culture within their individual workplaces, there are now avenues through which they can go to. The Parliamentary Workplace Support Service was set up specifically to handle these types of complaints. If those complaints have been felt to be handled inadequately. Well, that's probably a question that we can only ask those that are making the allegations.

JOURNALIST: Senator, how satisfied are you that the system is working properly, that the Parliamentary Workplace Support Service is fairly representing both sides in a dispute, and is not just spinning something out and hoping that the person who's made the complaint will go?

JANE HUME: I can't answer those questions, because the Parliamentary Workplace Support Service intentionally keeps all details of the cases that they're dealing with private. And so that should be the most important thing, though, is that there is somewhere for somebody that has a concern to go that will help manage their workplace conflicts. And by all accounts, the questions that have been asked of the Parliamentary Workplace Support Service at Estimates, that is a system that is evolving but working well. There is now also an Independent Parliamentary Standards Commission that is being established this month here in Parliament that will deal with allegations of breaches of codes of conduct. Codes of conduct for parliamentarians. Codes of conduct for staff. Codes of conduct for everyone else in the building, too, like all of you. And that's a new body that's been set up right now. There's been significant changes in the culture in the workplace in Parliament, in all Commonwealth Parliamentary workplaces, I think just in the time that I've been in the building, I would hope that those that those changes that I've felt, that the changes that I know my colleagues have felt, are filtered down if there are specific concerns, though they're probably best asked to those that the allegations have been made.

JOURNALIST: A slightly different question though, you were involved in the negotiations to establish these bodies and the structures around them, what provision is there and what mechanism is there in the way that PWSS operates to ensure that matters are brought to their head and resolved in a reasonable time? Is there a timeframe mechanism, or can they just be spun out?

JANE HUME: I think that when we do the review of the Parliamentary Workplace Support Service, obviously, it was a new service, and it has evolved on time. When the review of the Parliamentary Workplace Support Service is done, that will be, timeframes will be one of the issues that's addressed. I know that there are timeframes that embedded into the legislation for the Parliamentary Standards Commissioner, and that's a really important aspect, I think, to this. We can't allow issues to drag on forever. There has to be a natural justice in these issues, in an allegation. But most importantly, we want to make sure that workplaces are functional and working well. That's how we best represent people that we are voted in by.

JOURNALIST: Are you satisfied by the Government's response, which in part has been to say that they are limited in what they say because there could be legal action when, in fact, no legal action, or thus far they are not?

JANE HUME: I can't comment on that, and I think it's probably inappropriate (inaudible).

JOURNALIST: Just on the matter of the biscuits once again. You can pick up the prop. This is what Arnott’s say, “We invest in promotional programs to ensure consumers can buy Australian Australia's favorite chocolate biscuit, Tim Tam, at great value prices year round, the average price paid by Australian consumers for a regular pack of Tim town, original in past four months, was $3.15”, they have some source about grocery scan data, compared to the average price paid by UK consumers was $4.50 adjusting for exchange rate. So they say that, in fact, they are cheaper in Australia. Have they got that right? What do you think?

JANE HUME: Well that's not today's data. Today's data will show that at Tesco, they cost £2.50, which is equivalent about $4.87. At Waitrose, they have been discounted to two pounds. So that's even less. In Australia, they cost $6. Woolworths, I think it's Coles actually have discounted them temporarily to $4 no, sorry, to $4.50 but that's not their standard price. Their standard price is $6. So Arnotts may say that people are buying their products cheaply, but there isn't any evidence of that in the supermarkets.

JOURNALIST: Just on the divestiture powers though Jane, would you propose that as an amendment to the Government’s merger laws…(inaudible)

JANE HUME: The Coalition has been working on a private member's bill that will be presented to Parliament that will have our competition policy specifically for the supermarket sector contained in it. We'd wait to see the legislation, I think, from the Government before we want to (inaudible). That's not our intention to amend. We would like to see our Bill get through.

JOURNALIST: Just one on supermarket competition, were the Tim Tams bought from an independent grocer.

JANE HUME: That’s a very good question. In fact, I'm pretty sure that they were bought here at an independent grocer's right here in Canberra. Would you like to have a crack at Dean?

JOURNALIST: Can we share a Tim Tam?

JANE HUME: All right, I'll share out the Tim Tams. The moment you turn off the camera, because no one wants to see me eat a Tim Tam. It’s not lady like. Thanks guys.