Woolworths accused of price gouging
Monday, May 19, 2008/
A Sydney small business group has accused national grocery retail chain Woolworths of price gouging in some of its supermarkets in the city’s west.
The Southern Sydney Retailers Association discovered an average 134% price differential when it purchased a standard basket of 28 grocery items from the Fairfield and Greystanes Woolworth’s outlets.
The product basket was more than twice expensive at Greystanes than Fairfield, which is located just four kilometres away, because there is a higher level of competition at one and not the other, according to SSRA president Craig Kelly.
“It is simply about a lack of competition – at Fairfield, Woolworths has a small independent shopping centre directly opposite them and that keeps them honest in terms of price, but at Greystanes the independents have disappeared and that has allowed Woolies to pump up their prices,” Kelly says.
According to Kelly, this kind of geographic price discrimination constitutes price gouging, and he has called on the Government and the current Australian Competition and Consumer Commission inquiry into grocery prices to do something about it.
“How can Woolworths claim the market is ‘vigorously competitive’ when shoppers at two of their adjoining stores are being slugged with price differences averaging 134%,” Kelly says. “Such price gouging should not be allowed to occur and we urgently need laws outlawing geographic price discrimination. Until this form of price gouging is outlawed, Australian consumers will continue to be punished.”
Woolworths, which will appear today before the ACCC grocery price inquiry, says it is currently investigating the SSRA’s claim.