17 April 2024
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Labor gunning for Coles and Woolies. Watch their share prices fall!

Peter Switzer
25 March 2024

If you ever needed any reason to sell your Woolies or Coles shares, well, this World Bank data that says Australia is the third most expensive country for consumer goods in the G20 has given you one. And it’s a former Coles executive turned Labor MP who’s ringing the bell on this revelation.

Andrew Charlton is a respected economist, who has officially advised Federal Labor before winning the seat of Parramatta. Now he has told Sky News that Australia pays 108% more than the world average for vegetables, 41% more for meat and 73% more for other grocery items.

In what won’t be music to the ears of the CEOs of Coles and Woolworths, Charlton said executives of big food companies refer to Australia as “treasure island”.

He used this example to get his message through to many Aussies: “Let me give you one example, in the beer industry in Australia eight out of 10 beers are owned by just two foreign companies. Those two foreign companies have amassed 80 per cent market share and they charge Australians some of the highest beer prices in the world.”He said we fork out more than 50% extra for groceries compared to other countries. This tirade against the big players in the retail food space looks like a prelude to the Albanese Government’s attack on the big supermarket companies and any big player who’s a price maker.All this comes as the Government has unleashed the Australian Competition and Consumer Commission (ACCC) to investigate price gouging. This won’t be just about food prices. The ACCC is bound to look at air fares and other big companies with enormous market power facing little competition. “If you walk down the shampoo aisle in Australia, those hundreds of products, more than 50 per cent of them, are just owned by two companies,” Mr Charlton revealed.Clearly, if an assault on the price gouging companies of this country helps lower inflation and makes it easier for the Reserve Bank to reduce interest rates, then that will be good for the hip pockets of consumers and the Government’s re-election chances.Sky News reports that “… an interim report of the ACCC investigation into the supermarket sector is set to be given to the government in the second half of this year”. This attack on Coles and Woolies has been a key reason why I’ve shifted some of my financial planning clients out of these two stocks.

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