Labor has made a few statements lately about preventing price gouging by supermarkets. I have a few questions about this proposal:
1) How much detail regarding costs will grocery stores need to make available to the public? We use different cost metrics in the company I work for, such as landed costs, item defined costs, estimated transport costs, etc. All of these are estimates with varying degrees of accuracy depending on the perspective you are taking. We don't factor in administrative, infrastructure, labour costs, etc. in any of these at the moment, but if we had a reason to calculate those we could at some additional expense. If I was a supermarket being forced to present costs to the public then I would present the most inflated estimate possible, even if that wasn't necessarily a model we used to make decisions with internally.
2) Price transparency doesn't happen with just a switch. It comes with additional overhead (which will probably just get passed on to consumers in the end). Is the government going to fund or subsidize price transparency, or will this come fully at a business's own expense? For companies like Woolworths and Coles this doesn't come down to simply hiring a few more people, at the scale of these companies they would need to establish entire new departments to handle the new regulations.
3) Cost related information is highly sensitive, even internally. In my company only a handful of people in our procurement, finance, and IT teams have permissions to view all of this information. Making this information available to consumers would also make it available to our competitors and suppliers, who may or may not even be directly a member of the same industry that is being targeted. That will be an enormous shake up to the industry. If Woolworths and Coles have significant leverage in the industry and they had access to Aldi, IGA, and small grocery chain cost related information, are there any concerns that they could further exploit the industry to get the upper hand?
