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Today Tonight -

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(generated from captions) in the supermarket price wars. Now to the the latest salvos With Coles and Woolworths lower and lower, racing to get their prices by a Senate inquiry. discounting is now being examined Their main concern - fair to farmers i milk that's a dollar a litre against other retailers? and fair competition But it doesnt stop there. are the next battleground. Breakfast cereals Helen Wellings has the latest. last month, Just as Today Tonight predicted Coles is at it again, Cereals.

such as these products. All works White next so many prices are down,

followed suit. And cereals two

previous price cuts. Bread, free

range eggs, toilet paper, butter and

cream. We asked Jim Kubot of calls

what is next. We're not going to say

what we have planned in the future.

It is likely to be more staples.

Other competitors will have to

match. IGA warns these pricing

practices need urgent investigation.

We are looking at the Farmers,

obviously directly. Short-term gain

for market share. Long-term losses.

We did not stop this price war.

Coles and Woolies say that low price

staples are not sustainable. Simone

Berger. We would not have done Mr

dairy farmers. This is a sustainable

offer for a customer's. Does Coles

care about the dairy industry?

Industry critics at the Senate

inquiry heard calls his reforming,.

down. Honestly, we believe Coles is going

Coles' parent company, Wesfarmers, top executives from Britain has already imported three

to shape the changes. is saying is hypocritical hot air, I think a lot of what Woolworths if I am honest.

Coles boss Ian McLeod, industry three years ago, who arrived from the UK supermarket to boost Coles' bottom line. is leading the charge What we have done is

of competition in Australia, we have stimulated high levels we are competitive on price are fearing that coming through and all the other retailers in terms of their own results. by imported managers from the UK. Coles is now being run multimillion-dollar bonuses Presumably they'll be getting of Coles for increasing the market share when they get those bonuses, and, presumably they will be heading back to the UK that it causes and too bad about any devastation to Australian farmers. giving evidence Independent Senator Nick Xenophon just like Tesco, at the Senate inquiry says on suppliers down the chain, Coles is putting the squeeze on staples, heavily advertising low prices increasing generics on the shelves, to disappear. causing branded competitors just doesn't give a damn. It seems that Coles When branded milk sales drop, be able to make a decent living that means that dairy farmers won't off the land. and will force some of them if branded milk sales fall, The existing contracts make it clear a lesser rate overall, making margins of 2 cents a litre, and it means where they are a lesser rate overall it means they'll get

a economic business anymore. it means that they don't have

done in a way that is not hurting We think it is sustainable and is

price cut ourselves. the dairy industry at all ended this

on Home Brand milk Coles deny that the lower price on other goods, like petrol, is being offset by higher prices to more than $1.40 a litre which has risen at Coles Express Shell. whether there are other products, Coles needs to explain to us or whether it's petrol, whether products in the supermarkets losing on milk and other products that is subsidising what they are we all end up paying about the same. because if that's the case,