The ACCC’s investigation into supermarket pricing, which delivered its final findings in late 2025, confirmed what most Australians suspected: the duopoly of Coles and Woolworths is contributing to higher food prices and squeezing both suppliers and consumers.

But the details are more nuanced than the headlines suggested. Here’s what the inquiry actually found and what it means for how you buy food.

The headline findings

Coles and Woolworths together control approximately 65 percent of Australia’s grocery market. Aldi holds about 10 percent. IGA and independent grocers share about 7 percent. The remaining market is fragmented across specialty retailers, farmers markets, and online players.

The inquiry found that this concentration gives the two major chains significant market power, which they exercise in several ways:

Pricing asymmetry. When wholesale costs rise, retail prices go up quickly. When wholesale costs fall, retail prices come down slowly, if at all. This “rockets and feathers” pricing pattern — prices rocket up but feather down — was identified across multiple product categories.

Supplier pressure. Both chains use their dominant position to negotiate terms with suppliers that frequently work against the suppliers’ interests. These include retrospective price adjustments, delisting threats for suppliers who resist price reductions, and payment terms that effectively use supplier cash flow as interest-free credit.

Promotional manipulation. The inquiry found instances where products were marked up before being placed on “special,” creating the illusion of a discount that didn’t reflect a genuine price reduction. Some “Was / Now” pricing was based on prices that had only existed briefly or at limited locations.

What surprised me

The supplier evidence was the most revealing part of the inquiry. Farmers and food producers, many of whom were too afraid to give public testimony, described a system where the supermarkets hold almost all the power.

One vegetable grower described being told by a buyer that the price would be cut by 15 percent, effective immediately, with no negotiation. The alternative was losing the supermarket contract entirely, which would have meant losing 70 percent of their sales channel overnight.

A dairy farmer explained how the farm gate price for milk has barely moved in a decade, despite retail milk prices increasing by over 30 percent in the same period. The margin is going somewhere, and it’s not going to the farmer.

These stories aren’t new to anyone who follows Australian agriculture. But having them documented in an official inquiry gives them weight.

The “choice” illusion

One of the inquiry’s more interesting observations was about the illusion of choice in supermarket aisles. The appearance of a competitive market — hundreds of products, dozens of brands, regular specials — masks a reality where two buyers control most of the shelf space and therefore most of the market access.

A small food producer who can’t get into Coles or Woolworths is effectively locked out of 65 percent of the grocery market. Their options are limited to independent retailers, farmers markets, and direct-to-consumer channels — all valuable, but insufficient for scale.

What’s being done

The inquiry recommended several measures:

• A mandatory Food and Grocery Code of Conduct (replacing the current voluntary code)
• Greater transparency around pricing practices, including stricter rules on “Was / Now” pricing
• A dedicated supermarket price monitoring unit within the ACCC
• Measures to support supplier negotiating power

Some of these are being implemented. The mandatory Code of Conduct is progressing through parliament. The price monitoring unit has been established. But the structural issue — two companies controlling two-thirds of the market — remains unchanged. Nothing in the inquiry’s recommendations addresses that fundamental concentration.

What you can do

The structural issues require policy responses. But your individual shopping choices still matter.

Shop at Aldi when you can. Aldi’s presence forces competitive pricing from Coles and Woolworths. The more market share Aldi gains, the more pressure on the duopoly.

Support independent grocers. IGA stores, independent fruit shops, and specialty retailers provide competition and diversity. They’re often more willing to stock local and small-producer products.

Buy from farmers markets and directly from producers. When you buy a kilo of tomatoes from a farmer at a market, 100 percent of that money goes to the grower. When you buy from Woolworths, a significant portion goes to the retailer.

Pay attention to unit pricing. The unit price (price per kilogram or per litre) is displayed on shelf tags by law. Use it. It’s the only honest way to compare products. Ignore the headline price on the label — a “special” that’s more expensive per kilo than the competing product at full price is not a bargain.

Be sceptical of specials. Not all specials are genuine discounts. Check whether the “Was” price seems realistic. If you regularly buy a product, you’ll have a sense of what it normally costs.

The supermarket duopoly isn’t going to break up any time soon. But understanding how it works makes you a better-informed shopper, and better-informed shoppers are harder to take advantage of.