Coles and Woolworths refuse to answer questions about why Tim Tams are cheaper to buy overseas
Supermarket bosses have dodged questions as to why a pack of Tim Tams is more expensive in an Australian grocery store than it is in London.
Supermarket bosses have dodged questions as to why a pack of Tim Tams is more expensive in an Australian grocery store than it is in London.
Liberal Senator Jane Hume on Friday quizzed Coles and Woolworths senior executives on why a packet of the chocolate biscuits were $6 Down Under and about $4.86 at Tescos, a popular UK supermarket chain.
Senator Hume noted it was strange a product that was manufactured in western Sydney would cost more at a supermarket in the Australian city than it would at a store in London despite the rigmarole over freight costs and import taxes.
Woolworths chief commercial officer Paul Harker told a senate inquiry into the cost of living that it was probably a great question for Arnotts.
He said Woolworths adopted Arnotts recommended retail price and couldnt speak to negotiations the biscuit giant had with other markets.
I dont know what arrangements they do or dont have with selling that product into the UK market and what margins theyre expecting to make from that product in that market, Mr Harker said on Friday.
In this market, we have negotiated the best standard cost that we can every day with Arnotts... and we then put all our efforts into negotiating promotions on those products for consumers.
Coles head of public affairs Adam Fitzgibbons said it shouldnt be assumed that Arnotts sold their products at the same cost to Australian retailers as it did to international grocers.
A packet of Arnotts Original Tim Tam will set Aussies back $6 if bought from Coles or Woolworths (pictured from Woolworths online store)
However, overseas at leading supermarket chain Tesco, shoppers can grab the same product for £2.50 ($4.83 AUD) (pictured from Tescos online store)
Thats not something Coles would have visibility of at all, but I think thats certainly a question that would be very best directed toward Arnotts, he said.
We dont have visibility over, as we said, their commercials, what they sold at Tescos or their promotional arrangements with them, but those are the types of factors that would impact that retail price.
Taking aim at Coles, Senator Hume also noted the chain had Tim Tams on a promotional price of $4.50 and asked Mr Fitzgibbons whether the biscuits were being sold as a loss leader, in which an item is sold at a lower price to encourage customers to buy other products.
Mr Fitzgibbons said while promotional prices were negotiated with suppliers, he declined to add further details due to legal action with the Australian Competition & Consumer Commission (ACCC).
The watchdog is taking both Woolworths and Coles to court for allegedly misleading consumers by temporarily hiking prices by at least 15 per cent before slapping them with promotional discount stickers at prices higher than before the hike.
The ACCC claims Woolworths did this for 266 products in its Prices Dropped promotion over 20 months, while it alleges Coles did it for 245 products in its Down Down promotion across 15 months.
Supermarket bosses have dodged questions as to why a pack of Tim Tams is more expensive in an Australian grocery store than it is in London (stock image)
In September, Arnotts defended the cost of its 200g packet of Tim Tams after shoppers complained about the hefty price tag.
The company said it was experiencing significant input costs, including the surging price of cocoa.
During the inquiry, the supermarket giants also gave evidence that the grocery industry was very competitive despite the ACCC indicating Australias market was an oligopoly with dominant players Coles and Woolworth holding control of prices.
Greens senator Nick McKim asked why the views between the ACCC and the supermarkets were so diametrically opposed.
Mr Fitzgibbons said that while there were a limited number of supermarket chains, a high level of concentration does not equal a low level of competition.
Mr Harker said the report noted consumers were cross shopping more than ever.
I accept the fact we are a concentrated supermarket sector, and thats not determinative of a lack of competition, he said.
