Metcash, the Australian wholesaler serving the country’s largest independent grocers, has admitted it offers little competition to supermarket giants Woolworths and Coles.
Andrew Reitzer, the company’s chief executive, spoke before the Australian government inquiry into competition in the country’s grocery sector.
According to Australian newspaper The Age, Reitzer insisted that Metcash, which serves retailers IGA and Foodworks, gives independents “price, service and quality” – as well as assistance in marketing.
However, amid fierce questioning from Grant Samuel, chairman of the Australian Competition and Consumer Commission (ACCC), Reitzer admitted that on “everyday prices” retailers would match prices with their competitors – rather than try to drive prices down.
Nevertheless, Reitzer said that, on promotion, prices at independent retailers were lower than in Woolworths and Coles stores.
“That’s where the competitive tension is coming in,” Reitzer said, The Age reported.
Reitzer’s appearance before the ACCC inquiry follows the grilling of his counterparts at Woolworths and Coles in recent weeks.
Woolworths admitted to enjoying higher margins at its Australian stores than it does in New Zealand but insisted that its share of the Australian grocery market is just under 31% – not 40% as often quoted.
Coles also played down its share of the market and said it accounted for around 25% of grocery sales in Australia.
The Australian government said it would launch an inquiry into the country’s grocery sector earlier this year amid claims that a lack of competition was forcing up prices.
The ACCC is set to publish its findings in July.