A quarrel is brewing over whether Australia's major supermarkets Coles and Woolworths require the presence of an ombusdman to keep them in check. 

While Choice says Australia needs an ombudsman to protect consumers and food producers from being ripped off by big supermarkets groups, the Australian National Retailers Association (ANRA) says a supermarket ombudsman would be an unnecessary duplication of the Australian Competition and Consumer Commission (ACCC) and state-based consumer bodies.

“Choice’s sketchy proposal appears to just be a carbon copy of the powers and responsibilities currently held by the competition watch dog,” ANRA CEO Margy Osmond said.

“This plan would just create another layer of bureaucracy, the cost of which would land in the laps of taxpayers and consumers.

“The major retailers welcome scrutiny and always have. The major supermarkets fully participated in the extensive and exhaustive ACCC inquiry into grocery competition in 2008 which found the market was competitive. Since that time, a number of new players have entered and expanded in the Australian grocery market which is a true sign of competition, Osmond said.

Choice's recommendation has been backed by the NSW Farmers' Association, comes after the federal government's so-called Grocery Choice website project was scrapped last June.

Choice has urged Canberra to again look at the supermarket pricing issue and appoint a dedicated ombudsman to tackle issues of competition and fairness in the grocery sector.

The non-profit group says an ombudsman would deliver leadership in the sector, enforce regulatory rules and suggest rule changes, research where parts of the market are not working and support consumer education on unit pricing.

"There is a need for real leadership on resolving supermarket issues in Australia - rip-off prices, endemic unfairness and the lowest level of competition possible," Choice CEO Nick Stace said.

"There is a need for government to seriously consider a bold and robust policy that will bring about real change, not the window shopping currently taking place."

Supermarket giants Coles and Woolworths sell about 75 per cent of all packaged groceries in Australia and have been blamed for Australians paying the fastest-growing prices for groceries in the world.

Australia had the 10th highest food inflation of 30 OECD countries for the year to September 2009.

"These are industry-specific problems, which economy-wide regulators have been unable or unwilling to tackle head on," Stace said.

"It will go on like this for another 100 years unless radical and bold action is taken."

The NSW Farmers' Association said on Tuesday it was encouraged by Choice's proposal, saying it was similar to its own plan.

"Hopefully initiatives like those recommended by Choice and the association will mean more equitable returns for farmers and reasonable and transparent costs for consumers," the chairman of its horticulture committee Peter Darley said.

Farmers have long been concerned that farm gate prices for fruit and vegetables sold to supermarkets are often significantly well below the final sale price paid by consumers.

In June 2009, the Rudd government dumped plans for a Grocery Choice website to gather and compare grocery prices from 61 regions across Australia, saying its aims were not feasible.

Choice had been contracted to run the site when the government dumped the project a few days before it was due to be launched.

Meanwhile, residents in Mullumbimby on the NSW mid-north coast have banded together to try to prevent Woolworths from opening a store in their town due to fears about the impact on small shop owners.

The group, called the Mullumbimby Forum, says it has 1000 signed letters opposing the supermarket.

They describe Woolworths as a "$50 billion a year sales goliath that could devastate local enterprises, dragging people away from the main street with cut price deals until competition is gone".


©2010AAP