Believe it or not, supermarket ‘price gouging’ is not to blame for your high grocery bill

If you go down to your local Coles or Woollies, you're likely to find goat on the menu. That is, goat spelled "scapegoat."

Australia, like the rest of the world, is experiencing elevated inflation, and some of the perpetrators of that inflation are looking for someone to blame.

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As grocery prices have been rising along with everything else, and as most people's direct experience of inflation is through those prices, one potential explanation for inflation is that it is due to "price gouging" by the retailers of groceries.

Blaming supermarkets for inflation is an old Labor habit, with the Rudd government in 2007 establishing a website called Grocery Choice meant to put downward pressure on supermarket prices.

It never worked and finally had to be put down in 2009 by then Competition Minister Craig Emerson.

Ever since the last election, Labor-aligned drums have been beating the supermarket rhythm again.

We've heard from The Australia Institute blaming inflation on "excess profits." The Australian Council of Trade Unions (ACTU) narrowed it down to supermarkets and have conducted their own inquiry. We've also had a variety of farmers groups, like the National Farmers Federation, also complaining that supermarket prices only weakly reflect the price that farmers are paid. This is also coupled with calls to increase prices paid to farmers which would actually increase the prices supermarkets charge-but that's special interest lobbying for you.

The pressure was enough for Prime Minister Anthony Albanese to establish an inquiry into the Food and Grocery Code of Conduct under the same Craig Emerson, since retired from politics, the politician who had to give the last rites to Grocery Choice.

That wasn't good enough for some and the pressure was maintained on the government. While the ACTU's inquiry isn't due to report until February, its chair, Alan Fels, has pre-empted that release calling for an ACCC inquiry into the sector.

The government has obliged, but the announcement was made in such haste that even the ACCC doesn't know what the exact terms of reference will be, although they intuit, "The inquiry will examine the pricing practices of the supermarkets and the relationship between wholesale, including farmgate, and retail prices."

But is that really the whole picture?

So who is to blame for inflation, and what real role do supermarkets play in it?