Supermarket duopoly Coles and Woolworths could face criminal penalties if found to be overcharging customers, according to stringent recommendations from a damming new review.
Coles and Woolworths could face criminal penalties and risk being broken up for price gouging following a damning new Senate inquiry.
“The evidence brought forward by people willing to speak out about the business practices of Coles and Woolworths suggests that maintaining margins and increasing margin growth is occurring at the expense of suppliers, consumers and best business practices, and without proper justification,” the report said.
Divestiture powers refers to corporations being stripped of assets if they're found to have unfairly inflated prices and engaged in anti-competitive behaviour. Recommendations of a Labor government review by economist and former Labor minister Craig Emerson rejected the break-up power proposal and instead recommended supermarkets and suppliers follow a mandatory code of conduct backed by severe penalties.
Both Woolworths and Coles have opposed the suggestion of break-up laws due to the risk of “unintended consequences” but they have supported an overhaul of the grocery code of conduct.
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