The Government has directed the Australian Competition
and Consumer Commission to commence a formal inquiry into grocery
prices.

The Government has instructed the ACCC to take a broad
approach to its inquiry and ensure all aspects of the chain are
included – from the farm gate to the check out counter.

The inquiry will consider the current structure of the grocery
industry at the supply, wholesale and retail levels including mergers
and acquisitions by the national retailers; the nature of competition
and the pricing practices in the grocery industry; and factors
influencing efficient pricing of inputs along the supply chain.

The ACCC is required to report to the Minister  by 31 July 2008.

UPDATE 2 February: ACCC’s announcement that it will release an Issues Paper soon.