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=More pressure on supermarkets to cut prices= Kathryn Stolarchuk reported this story on [|Saturday, July 18, 2009] 08:20:00 [|Listen to MP3 of this story ( minutes)] Alternate WMA version | [|MP3 download] BRENDAN TREMBATH: The Reserve Bank has done the maths and found that Australia's grocery prices are rising faster than the current rate of inflation.

Since 1993, prices have increased by an average of four per cent each year. Some groups blame the dominant retailers Coles and Woolworths.

There are calls for greater competition in the industry.

Kathryn Stolarchuk has this report.

KATHRYN STOLARCHUK: New research from the Reserve Bank proves what most shoppers already knew: Australia's grocery prices have soared.

The price of goods is rising faster than the current inflation rate of 2.5 per cent. Basic necessities such as fruit and vegetables, dairy and bread all exceed this figure.

CHRISTOPHER ZINN: This will come as no surprise to anyone who does the shopping. You really don't have to be a Reserve Bank economist to know that fresh produce out of all the things that you buy in the grocery story have really been going up.

KATHRYN STOLARCHUK: Christopher Zinn is from CHOICE. He says lack of competition has contributed to the higher prices.

CHRISTOPHER ZINN: Really the one thing we can change in the short term is to look at how competitive this sector is and what can be done to inject more competition because that is the one thing that really is the consumer's friend in this issue.

KATHRYN STOLARCHUK: But Margy Osmond from the Australian National Retailers Association says the industry is highly competitive.

MARGY OSMOND: If you've got companies like Costco and Aldi, Foodworks, all entering the marketplace, that doesn't tell me it's uncompetitive marketplace; that tells me it's a very healthy marketplace and consumers are getting the benefits from it.

KATHRYN STOLARCHUK: She says the Coles and Woolworth has nothing to do with the higher prices.

MARGY OSMOND: I think it's easy to pick the big grocers sometimes as a target, and I think it's completely unwarranted.

If you ask your average Australian where they shop something like half of them like to buy their fresh fruit, vegetables, meat and so forth at a supermarket, just as many like to buy it from the local butcher or the corner store.

KATHRYN STOLARCHUK: And Australian Competition and Consumer Commission chairman Graeme Samuel agrees.

GRAEME SAMUEL: I have refer people back to the grocery inquiry report that we did some now 18 months ago, which pointed out that in terms of margins, the contribution to increasing prices have been very, very small indeed.

KATHRYN STOLARCHUK: He says the higher prices are due to a number of factors.

GRAEME SAMUEL: The RBA points out that an element of this has had to do with what they call raw food import prices; that is the somewhat poor conditions for agriculture in Australia.

And of course we're talking about that in terms of the drought and the rise in prices globally.

KATHRYN STOLARCHUK: Christopher Zinn from CHOICE says they want to help consumers make the right decision.

CHRISTOPHER ZINN: What at CHOICE we're going to do is to help consumers be more active and savvy when it comes to decisions that they make in groceries particularly, but also in a number of other fields.

KATHRYN STOLARCHUK: But the ACCC's Graeme Samuel believes that for the most part shoppers can take care of themselves.

GRAEME SAMUEL: I think the Australian consumer is a pretty savvy lot; they know where they can buy their goods at the best price, where their convenience is best suited in terms of location and they have a pretty good idea about what they want.

BRENDAN TREMBATH: The Australian Competition and Consumer Commission chairman Graeme Samuel ending Kathryn Stolarchuk's report.
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