Price check for supermarkets

Australian grocery bills will come under scrutiny following a price inquiry into the grocery sector initiated by the federal government. The move follows an election promise by Treasurer Wayne Swan to look into the rising cost of basic goods.

The Australian Competition and Consumer Commission (ACCC) will spend the next six months listening to consumers and examining independent producers, convenience stores and supermarket chains.
 
"The ACCC will be developing a basket of grocery goods, and will have periodic surveys of the prices of those goods in locations across the country," says Assistant Treasurer Chris Bowen. The basket will contain staple items such as bread, milk, eggs, fruit and vegetables.
 
Bowen claims food prices in Australia have risen faster than other countries in the decade to 2006. "While inflation has been low over the last few years, food inflation has been higher than average, and there is considerable evidence to suggest Australian food inflation has been higher than the world average."
 
Supermarket giants Coles and Woolworths, who together control 78 percent of the grocery sector, say that price rises have nothing to do with inflation and plenty to do with the ongoing drought and increased operating costs such as the rise in the price of oil.