Woolworths, Coles point finger at Bunnings, Chemist Warehouse

In his first pass on the code, Emerson suggested some sensible improvements. First, make the code mandatory and second, beef up the size of the fines so they better reflect the infringement.

While there is no downside in giving the code stronger teeth, there is no obvious evidence it was being abused by the supermarkets, given there have been only six disputes lodged since 2021.

Complaining about the cost of shrubs doesn’t really elicit the same response as does the portrait of a pensioner scraping the bottom of their purse to buy milk.

Sure, this could reflect small suppliers being fearful of complaining about their treatment at the hands of the big supermarkets, or it could mean that the relationship between suppliers and supermarkets is not a problem.

That said, shoring up the code is designed to improve suppliers’ bargaining position, which in turn should enable them to receive a better price from supermarkets.

But how such an outcome is meant to achieve the government’s second objective of reducing the prices that consumers are paying at the checkout is a brain twister. (There are numerous government-sponsored inquiries into supermarket pricing already under way and the chief executives of Coles and Woolworths will be publicly grilled in Canberra next week.)

It’s economics 101 that if the supermarkets are paying more to suppliers, this increase will ultimately be passed to consumers.

In this respect, the two prongs of the government’s war on supermarkets actually fight each other.

Emerson took to morning television in an attempt to reconcile how helping suppliers can also assist in lowering the price at the checkout.

“As for shoppers, this review is about the relationship between suppliers and the supermarkets. And the way that this can work through well for shoppers is if suppliers can get a reasonable return on their investments. They’ll have enough money to invest in new technologies that reduce the prices that they charge while still making money, and increase the quality of the products … so, it works both ways,” he valiantly explained to the audience of toast-butterers.

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His explanation seems as wishful as it does theoretical.

Meanwhile, the supermarkets are caught in this government pincer which seems intent on proving they are making too much money – either by financially monstering their customers (many of whom are struggling with a cost-of-living crisis) or their suppliers (such as beef farmers or zucchini growers).

Suggestions that the supermarkets are receiving profit margins aligned with their international peers are being drowned by the rest of the noise.