Aussies who eat microwave meals are being ripped off because of Coles and Woolworths,

Australians who eat ready-made microwave meals are being ripped off, a supermarket chain chief says.

Metcash, the supplier behind independently-owned grocery stores IGA and Foodland, told a parliamentary hearing its major competitors Coles and Woolworths had cornered the ready-made meal market.

Grant Ramage, the chief executive of Metcash’s food division, said the bigger supermarkets had bought companies that made microwave meals, making it harder for smaller grocery chains to sell these products.

‘They’ve also chosen to vertically integrate by buying production facilities in areas like ready-made meals, where the capacity overall in the market is significantly limited in Australia and therefore there are fewer and fewer suppliers left for us to deal with,’ he told the House of Representatives economics committee on Tuesday.

‘Inevitably, that means that we will have less competition, pay higher prices and be unable to be competitive enough for those prices to shoppers.’

Australians who eat ready-made microwave meals are being ripped off, a supermarket chain chief says (stock image)

Mr Ramage said the dominance of Coles and Woolworths made it hard for the likes of Metcash to source private label goods at a wholesale level. 

‘When we want to source private label products, there are often only a small number of manufacturers who are both willing and have the capacity to produce,’ he said.

‘That’s often where we find that it’s very hard for us, as the fourth player in the market, to be able to find a supplier who can supply the volume that we need at a competitive price, and often that is because the larger groups have already taken that volume and that capacity, sometimes with those exclusive arrangements in place.’

Mr Ramage said Australian consumers ended up paying more for ready-made meals.

‘We do our very best to overcome that and work hard to be competitive,’ he said.

‘More action like that certainly makes it very hard for us and is not in the interests of the Australian community.’

Metcash, the owner of independently-owned grocery stores IGA and Foodland, told a parliamentary hearing its major competitors Coles and Woolworths had cornered the ready-made meal market (pictured are Woolworths private label meals)

There is more competition, however, in the fresh food market because there are more suppliers of fruit and vegetables.

Metcash has only a 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 by 5.6 per cent in the year to May but the other food products category, that includes ready-made meals, surged by 11.5 per cent in the Australian Bureau of Statistics data. 

Grant Ramage, the chief executive of Metcash’s food division, said the bigger supermarkets had bought companies that made microwave meals, making it harder for smaller grocery chains to sell these products