The Rudd Government has been urged to come up with a replacement for its Grocery Choice price comparison website, which was controversially scrapped late last week.
Competition and consumer law specialist at University of New South Wales, Associate Professor Frank Zumbo says the GroceryChoice site was inherently flawed as it was only updated monthly or weekly and did not offer information specific to a suburb.
He claims supermarkets have the capacity to offer this kind of information but they’re reluctant to do so.
“We need real-time reporting of this information,” Zumbo says. “Now that the GroceryChoice is gone, the Government needs to come up with a plan B,” he said. “We need a law against geographic price discrimination.
“Unless the Government cracks the whip, it will be a long time before we’ll see any serious action coming from Coles and Wollies.”
The Rudd Government pulled the plug on the $13 million GroceryChoice initiative on Friday, just days before its launch on 1 July.
While retailers applauded Minister for Competition Policy and Consumer Affairs Craig Emerson for scratching the program on Friday 26, Nick Stace, the chief executive of consumer group Choice, which was to take over the site on behalf of the Government, called it a bad day for consumers.
“I am shocked and disappointed at the decision by the consumer minister to side with supermarkets rather than consumers,” Stace said. “Supermarket prices are higher in Australia than many other developed countries and Choice agreed to deliver GroceryChoice because we believed we could make a difference for consumers.”
Stace said the new website would have delivered consumers up-to-date information on thousands of products within weeks.
“To pull the site five days before launch shows that we were on the money and the supermarkets are worried about losing out to consumer demands,” he said.
Instead, the Government wants retailers to form their own online product pricing websites.
Australian Retailers Association executive director Richard Evans called the GroceryChoice site “out-of-date” and said it wouldn’t have offered customers a relevant price comparison tool.
“The Australian grocery market is highly competitive – prices can change by the hour and vary between locations,” Evans said. “The information on the GroceryChoice website provided no community benefit and by recognising this, Minister Emerson has saved taxpayers $13 million.”
But Zumbo says Australian consumers need more protection.
“We need laws against geographic price discrimination, otherwise consumers are being ripped off,” Zumbo says.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
