Interview with Tom Elliott, 3AW Mornings

14 October 2024

TOM ELLIOTT: The Shadow Minister for Finance and chair of the Select Committee on cost of living, which we've been talking about extensively over the past few weeks. Senator Jane Hume, good morning.

JANE HUME: Good morning Tom, great to be with you.

TOM ELLIOTT: Now, there's all sorts of things. I know that the two big supermarkets are being investigated by the ACCC for, you know, these sale items that aren't really on sale. So something's $4 they mark it up to $6 then they reduce it to $5 and they go, Oh, look, it's $1 off. That's one issue. And the other issue is just this survey done by one of our listeners suggesting that the Woolworth subsidiary in New Zealand seems to sell a lot of Australian products more cheaply in New Zealand than they do here in Australia. So I know we don't have a conclusive result on this yet, but do you think that the big supermarkets have a case to answer?

JANE HUME: Well, certainly, when we had both Coles and Woolworths appear in front of the cost of living hearing last week, we asked them lots of questions about how they go about setting their prices and why they might be different from one country to another. This is the second time that Coles and Woolworths have appeared in front of the cost of living community with In fact, our 21st hearing. We've been going since September 2022, and we've covered a lot of different sectors, but grocery prices seem to be one of the biggest pressure points that Australians are facing, and certainly, the Coles of Woolworths and the other supermarket chains have some amazing insights into consumer behavior. So for instance, they told us that about 70% of consumers now are cross shopping. So that means that they're going to two to three stores every week, starting with the discount stores, and then they're going to the large supermarket to get the items that they can't access elsewhere. So that's an amazing consumer behavior that we're seeing because of those rising prices of groceries.

TOM ELLIOTT: That's interesting, because in the old days, I think most people and time is obviously an issue as well. We just go to the nearest supermarket and just assume that, oh, well, I'm sure I'll get an okay deal here. What about, this issue of stuff being cheaper in New Zealand, and here is that. Is that worth looking at, do you think?

JANE HUME: Look it is, but I think it's not just the supermarkets that we need to look at. It's also the producers as well. And that was certainly one of the things that colza Woolworth pointed to, they said that while fresh food has actually gone down in price, very recently, packaged and processed foods have gone up, and that about 12 and a half 1000 items have gone up in this sector since February 2023, with the average ask of producers being about 10% more than that was then. So that's pretty that's a very significant amount of money. And some of those producers, like Nestle and Mondelez, they appeared at the Committee hearing before this one, and they said that things like energy prices, gas prices in particular, which have gone up around 100% for Victorian factories in the last year and this year are pushing up their prices and, of course, things like regulation. So anytime there's a change to packaging laws that you know you have to disclose, do climate disclosures or dietary disclosures, those regulatory complexities divert resources, and they also cost, like a label change across the portfolio of products, costs about $3.5 million to those every time. So that gets passed on in the form of higher cost of groceries at the checkout. So you can see where decisions of government actually have a flow on effect. And one of the things that the coalition have been talking about, the decisions the Labor government have made have had a flow on effect to higher prices, rather than helping to decrease those prices.

TOM ELLIOTT: We'll stay on this. Thank you for joining us. Senator Jane Hume there, Shadow Minister for Finance and Chair of the Select Committee on the Cost of Living.