Supermarkets have bulked up. These days they’re retail superpowers who make money not just when we eat or drink but increasingly when we fill the petrol tank, play pokies or buy a hammer from the local hardware – and they’re quietly stalking pharmacies, newsagents and florists.
But food is their staple. Coles and Woolworth’s sell 70 per cent of the dry groceries and half the fresh food that Australians consume – among the highest concentrations of market power in the developed world.
Last month the competition watchdog the ACCC officially ticked this arrangement, insisting the market is working.
But the growth in supermarket muscle has come at a cost to many suppliers and small retailers. "Crippling" is how one industry analyst terms Coles’ and Woolies’ power over food producers; the regulator calls it "simply tough dealing".
Like suppliers to the big supermarkets, minnow retailers are fed up – but more outspoken. Small liquor merchants can get some beer and wine cheaper from supermarket-owned retail grog barns than they can from wholesalers. Some refuse to see this as competition: "In the 36 years I’ve been in our two shops I’ve had 12 armed hold-ups, 11 with a gun and one with a machete, and the biggest predator we face is this company here."
While Coles’ and Woolies’ market clout can translate into cheap prices for consumers, there are fears it may threaten the survival of Australia’s food industry. As reporter Stephen Long reveals, these concerns are held by eminent people at the very top of the food chain.