Supermarket bosses have dodged questions about why a packet of Tim Tams is more expensive in an Australian grocery store than in London.
Liberal senator Jane Hume on Friday grilled senior executives at Coles and Woolworths about why a packet of chocolate biscuits cost $6 in Australia and around $4.86 at Tescos, a popular UK supermarket chain. .
Senator Hume noted that it was “strange” that a “product made in western Sydney would cost more in a supermarket in the Australian city than in a shop in London, despite the “rigmarole” about shipping costs and taxes. import.
Woolworths commercial director Paul Harker told a Senate inquiry into the cost of living that it was “probably a big question for Arnott’s”.
He said Woolworths adopted Arnott’s “recommended retail price” and could not discuss negotiations the biscuit giant had with other markets.
“I don’t know what agreements they have or don’t have to sell that product in the U.K. market and what margins they expect to make on that product in that market,” Harker said Friday.
“In this market, we have negotiated the best standard cost we can every day with Arnott’s… and then we put all our efforts into negotiating promotions on those products for consumers.”
Coles head of public affairs Adam Fitzgibbons said it should not be assumed Arnott’s sold its products at the same cost to Australian retailers as it did to international grocers.
A pack of Arnott’s Original Tim Tam will cost Australians $6 if purchased at Coles or Woolworths (pictured from Woolworths online store)
However, overseas at leading supermarket chain Tesco, shoppers can buy the same product for £2.50 ($4.83 AUD) (pictured from Tesco’s online store)
“That’s not something Coles would have visibility into at all, but I think it’s certainly a question that would be best directed to Arnott,” he said.
“We don’t have visibility into, as we said, their commercials, what they sold at Tescos or their promotional deals with them, but those are the types of factors that would impact that retail price.”
Taking aim at Coles, Senator Hume also pointed out that the chain had Tim Tams at a promotional price of $4.50 and asked Mr Fitzgibbons if the biscuits were being sold as a loss leader, where an item is sold at a lower price to encourage customers to buy. other products.
Fitzgibbons said while promotional prices were negotiated with suppliers, it declined to add further details due to legal action with the Australian Competition and Consumer Commission (ACCC).
The watchdog is taking Woolworths and Coles to court for allegedly misleading consumers by temporarily increasing prices by at least 15 per cent before slapping promotional stickers on them with discounts at higher prices than before the increase.
The ACCC claims Woolworths did this with 266 products in its Prices Dropped promotion over 20 months, while it alleges Coles did this with 245 products in its Down Down promotion over 15 months.
Supermarket bosses have dodged questions about why a packet of Tim Tams is more expensive in an Australian grocery store than in London (file image)
In September, Arnott’s defended the cost of its 200g pack of Tim Tams after shoppers complained about the high price.
The company said it was experiencing significant input costs, including the “increased price of cocoa.”
During the investigation, the supermarket giants also gave evidence that the grocery industry was “very competitive” despite the ACCC saying the Australian market was an “oligopoly” with dominant players Coles and Woolworth controlling the prices.
Greens senator Nick McKim asked why views between the ACCC and supermarkets were so “diametrically opposed”.
Mr Fitzgibbons said that while there were a “limited number of supermarket chains”, a “high level of concentration does not equate to a low level of competition”.
Harker said the report noted that consumers were “cross-shopping more than ever.”
“I accept the fact that we are a concentrated supermarket sector and that is not a determinant of a lack of competition,” he said.