Petrol, freight drought..how many more excuses will we hear.?

Its said the real reason for the high prices of food is the monopoly of the market by Coles and Woolworths.

What can be done?

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Independents cry foul on big two's grocery price difference

March 27, 2008

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SYDNEYSIDERS are paying 5 per cent more than Perth residents for everyday grocery items bought from the two supermarket giants Coles and Woolworths, according to a survey by independent grocers.

As the Government's inquiry into national grocery prices prepares for its first public hearings in Sydney next week, the chairman of the National Association of Retail Grocers of Australia, John Cummings, said in an address to the National Press Club that higher prices in Sydney were the result of the dominance of the two chains.

Just 10 per cent of groceries sold in Sydney were sold through independents, versus 32 per cent of groceries in Perth, he said.

Mr Cummings' claims are based on a price comparison of 13 items sold at Coles and Woolworths stores at Warringah Mall in Sydney and a Perth IGA on March 10.

The results are hotly disputed by Woolworths and Coles; Woolworths said the results were "misleading and not credible".

The survey found the giants were charging 5 per cent more in Sydney, despite the extra costs in transporting goods to Perth. A 400 gram can of Heinz baked beans was $1.59 in both Sydney stores, versus $1.40 in Perth. A two-litre bottle of Coke cost $3.15 in Sydney versus $2.99 in Perth.

"Shoppers in Warringah Mall do not benefit from competition; they are victims of market sharing," Mr Cummings, who is the part-owner of the IGA store surveyed in Perth, said.

Warringah Mall contains two supermarkets: a Coles and a Woolworths. There is an Aldi store nearby, but Aldi tends to stock different brands.

A spokesman for Coles, Jim Cooper, said the survey was not large enough and other price surveys had found Coles's prices to be "substantially cheaper" than independent stores.

"[We] don't propose to give credence to Mr Cummings's survey of a handful of products from a store containing over 20,000 product lines."

A spokeswoman for Woolworths, Clare Buchanan, said prices were set by individual stores based on a range of factors, including the price of nearby competitors. On average, there was a less than 1 per cent difference between prices in any two states.

"Certain product prices might be a few cents higher or lower in different states at different times," Ms Buchanan said. "For example, while Heinz Beans and Coke may well have been slightly cheaper in WA at that time, other products such as Vegemite, Nescafe coffee and Pepsi were cheaper in NSW.

"Picking only two products out of 30,000 at one particular moment in time in order to justify an entire argument is misleading and not credible."

An inquiry into grocery prices by the Australian Competition and Consumer Commission, an election promise of the Rudd Government, has had 118 submissions. The first public hearings will be held in Sydney next Tuesday and Wednesday. The commission is due to complete its report by July 31.

I think coles and woolies got done a while back for price fixing on eggs and milk.

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