Australians eating microwave meals are being ripped off by Coles and Woolworths, MetCash boss warns
Metcash Food chief Grant Ramage slams big supermarket rivals, says ready meals market cornered
Australians who eat ready-made microwave meals are being ripped off, the head of a supermarket chain has said.
Metcash, the wholesale distributor behind independently owned grocers IGA and Foodland, has told a parliamentary hearing that its main competitors Coles and Woolworths have cornered the ready meals market.
Grant Ramage, chief executive of MetCash’s food division, said big supermarkets had bought companies that made microwave meals, making it harder for smaller grocery chains to sell these products.
“They’ve chosen to integrate vertically by buying production facilities in areas like processed foods, where overall capacity in the market in Australia is significantly limited and so we’re left with fewer and fewer suppliers to deal with,” he told the House of Representatives’ economics committee on Tuesday.
‘Of course, this means we will be less competitive, have to pay higher prices and not be competitive enough for those prices for buyers.’
Australians who eat ready-made microwave meals are being ripped off, supermarket chain boss says (stock image)
Mr Ramage said the dominance of Coles and Woolworths made it difficult for the likes of MetCash to promote private label products at the wholesale level.
‘When we want to source private label products, they are often a small number of manufacturers who are both willing and able to produce,’ he said.
‘Often we find that as a fourth player in the market it’s very difficult for us to find a supplier that can supply the volume we need at a competitive price, and often that’s because larger groups have already taken that volume and that capacity, sometimes with that monopoly.’
Mr Ramage said Australian consumers were paying more for ready meals.
‘We try our best to overcome it and work hard to be competitive,’ he said.
‘Further action like this makes it very difficult for us and is not in the interests of the Australian community.’
Metcash, owner of independently owned grocers IGA and Foodland, told a parliamentary hearing that its main competitors Coles and Woolworths cornered the ready meals market (pictured Woolworths private label food)
But there is more competition in the fresh food market because there are more suppliers of fruits and vegetables.
MetCash has just 7.4 per cent market share, compared with 37.2 per cent for Woolworths, 30.3 per cent for Coles and 9.2 per cent for Aldi, IBISWorld figures show.
Inflation rose 5.6 percent in May but the food product category, which includes prepared foods, rose 11.5 percent.
Grant Ramage, chief executive of MetCash’s food division, said large supermarkets had bought up companies that made microwave meals, making it difficult for smaller grocery chains to sell these products.