Greens senator aims for Woolies

Jail threat amid grilling

Woolworths chief executive Brad Banducci has been accused by the Greens-led Senate inquiry into the supermarkets of trying to “bulls--t” the committee over the true profitability of the retailer by “cherry-picking” facts and engaging in spin.

Appearing before the Senate inquiry on Tuesday, Mr Banducci was immediately savaged by inquiry chairman, Greens Senator Nick McKim, who accused Woolworths of profit gouging, misusing its market power, and profiteering at a time when many Australians are dumpster diving to feed themselves.

After repeatedly asking for financial information, Senator McKim warned that Mr Banducci could face jail of up to six months if found in contempt for not answering the question about Woolworths’ return on equity.

“It is open for the Senate to find you in contempt,” Senator McKim said after asking Mr Banducci again what that return on equity figure was.

In his opening address to the inquiry, Mr Banducci said the recent high inflationary environment had caused many of its customers to live under cost-of-living pressures, pushed by higher mortgages, energy bills and grocery prices.

He said, however, that inflation was starting to fall.

In this environment, Woolworths made a “reasonable profit”, Mr Banducci said, while also making “considerable investments” in its operations.

Mr Banducci said the supermarket had acted to offer cheaper groceries, especially under its private label offering, as well as offer tools on its digital platforms to help shoppers plan and budget their shop.

Mr Banducci also denied the supermarket chain engaged in “land banking” – the strategy of buying up land or properties to limit or stop competitors entering into specific neighbourhoods

In a series of heated clashes, Senator McKim berated Mr Banducci over his refusal to divulge Woolworths’ return on equity, with Mr Banducci only willing to discuss Woolworths’s return on funds employed.

Senator McKim said Woolworths’ return on equity was around 26 per cent, which was around 2.5 times higher than Australian banks, a figure that he described as “rapacious”.

He then accused Woolworths of “making off like bandits” with its high profits.

Later Mr Banducci disputed the view that Woolworths had a high market power and argued that if food and grocery stores, retailers like Chemist Warehouse and Amazon, as well as traditional supermarkets were all included, then the market share was much lower.

Senator McKim asked Mr Banducci if he accepted the fact that Woolworths and Coles controlled around two-thirds of the food and grocery sector.

Mr Banducci in response said Australians “cross shopped” and that if you included this broader range of retailers, including Amazon, then Woolworths only had around a 20 per cent market share.