Supermarket inquiry a diversion, says VFF president

That's according to Victorian Farmers Federation president Emma Germano who, along with Australian Competition and Consumer Commission deputy chair Mick Keogh, were guest speakers at last Friday's Farm Writers' Association of NSW lunch in Sydney.

As well as being president of the VFF, Ms Germano runs a mixed farming operation which produces horticulture products and sheep and beef.

And while she has "enjoyed bashing up the supermarkets", Ms Germano said while addressing the 150-strong audience, the cost of living crisis can't be put solely at their feet.

"There is no question the supermarkets have played a major role in how successful my business can be," she said.

"What's been really interesting is the commentary coming out about the supermarkets has largely been from a lot of people who are not necessarily direct suppliers to them.

"So whilst I'd love to bash up the supermarkets today because that is what's trendy and makes us all feel good, what we've all done is just run down this track of the the best smoke screen I think that I've seen the federal Government play in the last 10 years."

She said the cost of living crisis had far more to do with the policies that were in the government's control, and this inquiry was a convenient misdirection from the government's own failings.

"This issue between supplies and supermarkets has been a 20-year issue," she said.

"Now all of a sudden we care. Why does Government care?"

She said politicians only cared about the "poor farmers" because it suited a narrative of the federal Government's to get out of the fact that energy was so ridiculously expensive.

This was in turn a problem derived from the country's failing energy security; its industrial relations system having become a complete and utter mess and totally impossible to manage as a small business; and the cost of having staff on farms having increased about 20 per cent throughout the past four years, she said.

"Supermarkets are making on average between two and three per cent net profit," Ms Germano said.

"Is that really exorbitant? Are we actually saying the supermarkets are making too much money?

"On the price gouging inquiry, the simple one line should have been that it's more expensive to buy meat at your butcher and it is more expensive to buy vegetables from the market."

Ms Germano said issues between supermarkets and suppliers have been an issue for a very long time.

"The issues within the relationships between suppliers and the supermarkets no doubt are an issue," she said.

"So is it good that we are starting to address that relationship?

"Yes, but is it good that we are letting a federal Government get away with the fact that the biggest increase to the price of production are the things that are within their purview that they have done nothing about.

"And not just this government."

She said it was "all cute" that we have the federal Nationals leader David Littleproud saying "oh, the supermarkets, the supermarkets".

"Well why didn't you do something about the supermarkets and that problem when the Coalition was in government?" she asked.

"My biggest concern is we are all looking in the wrong direction."

Mr Keogh said the issue of supermarkets was one that engaged many people.

He said the ACCC had been directed by the Treasurer to conduct a year-long inquiry and it was important it was understood the inquiry was two-sided.

"It's looking at the role of supermarkets from a consumer perspective," he said.

"In other words, the prices consumers pay, the arrangements consumers exercise, their ability to go to supermarkets and make choices and all those sorts of things.

"But it's also focused on the supply side, the situation of suppliers who engage with supermarkets.

"We kicked off the inquiry early in March with two things. One is an issues paper that went out for stakeholder comment and submissions and the other was an online consumer survey that had taken about 10 minutes.

"Interestingly, we received the highest level of responses we've ever received to a consumer survey with 22,000 people completing the entire survey."

He said this highlighted from the consumer perspective the absolute significance they see in the role of supermarkets in their lives.

"We've also had quite a deal of engagement from suppliers, both in terms of submissions and also direct face-to-face meetings," Mr Keogh said.

"One of the interesting aspects of that, which maybe wouldn't surprise some people in the room, is quite a deal of hesitation on behalf of suppliers.

"In fact, with some of them insisting on confidentiality, we've even had meetings in obscure coffee shops to assure them of the degree of confidentiality associated with it."

As for whether there been enough political will to address supermarket pricing throughout the past 20 years and whether the latest Senate committee and ACCC inquiries would make a dent, Mr Keogh said there was no doubt governments had struggled with the nature of markets.

"If you look at the nature of them, they've got highly perishable products, they've got very opaque pricing and very difficult to find appropriate price discovery," he said.

He said supermarkets often dealt with a number of variables, such as rubbery estimates of the volumes and seasonality of what product would be available.

"So all those elements in together make for a very difficult market," he said.

He said he recently read a 1960s Royal Commission into the Victorian markets and the findings contained a number of parallels that would still be current in today's inquiries.

Part of the process was that those conducting the inquiry were not rule makers or law makers.

"(The) governments ultimately make the decision about whether they adopt those recommendations and what they do about it," he said, also referring to similarities between those inquiries of 60 years ago to now.

The ACCC's interim report is expected in August and a final report in February next year.