Coles faces ACCC supermarket inquiry, ASX closes down after Bitcoin hits record high, Mineral Resources fronts investors — as it happened

That's all from us at the ABC business team today.

You can keep watching the ACCC supermarkets inquiry here:

The S&P/ASX200 closed down slightly by 3.30 points, or 0.1 per cent, at 8,323.00 points on Thursday.

Bitcoin set a new high topping US$97,000 and cementing a massive surge since the US election on November 5.

Many commentators have been saying it could soon breach the historic US$100,000 barrier.

According to media reports, US president-elect Donald Trump is pushing for a new White House post dedicated to cryptocurrency policy.

Bloomberg reports Trump's team is holding discussions over whether to create such a role and the industry is pitching for the position to have direct access to the president-elect, who is now one of crypto's biggest cheerleaders.

Thanks for the question James.

Their forecasts were very different to today's.

You can read more on those earlier forecasts in this story in May from my colleague Gareth Hutchens here:

US regulators want a federal judge to break up Google to prevent the company from continuing to squash competition through its dominant search engine after a US court found it had maintained an abusive monopoly over the past decade.

AP reports the proposed break-up floated in a 23-page document filed late on Wednesday by the US Justice Department.

It calls for Google to sell its industry-leading Chrome web browser and impose restrictions designed to prevent its Android smartphone software from favoring its search engine.

More on this breaking story here:

Mineral Resources shareholders have delivered a strong message to the company about its handling of the recent scandal, with a protest vote against its remuneration report, based on the proxy votes lodged prior to the meeting.

That's a "first strike" against the company, meaning if next year's remuneration report is also rejected, investors will vote on whether to consider spilling the whole board.

Reporter Courtney Withers is on the ground in Perth, where managing director Chris Ellison has faced shareholders.

You can read more here:

What likelihood do you place on an overseas supermarket entering Australia in next 10 years?

The inquiry's counsel Naomi Sharp SC asks Coles CEO Leah Weckert this question.

Ms Weckert answers that it's on Coles risk register.

She's then asked to assign what level of risk.

"We don't assign a magnitude to it, we just have it as a risk," Ms Weckert says.

Sharp asks whether it's in the category of "far-fetched and fanciful or highly likely?"

The Coles boss responds: "If you look across the last 20 years, or  just over 20 years, we've had Aldi and Costco enter."

She notes German hypermarket chain Kaufland tried to, and Amazon has already come in as a major competitor.

"So I don't think it's on the fanciful side," the Coles CEO says.

Those who are old enough will remember the company running Coles used to run another supermarket called Bi-Lo.

The supermarket chain was owned by Wesfarmers.

As those chains were converted to Coles-branded supermarkets, something strange happened.

It meant that in some areas - for example Melbourne's suburb of Northcote - one shopping centre ended up with two Coles supermarkets.

Earlier, the inquiry's counsel Naomi Sharp SC asked whether Coles acquired a shopping centre in which a competitor was operating.

Coles says this has happened on two occasions and it was because the sites were the "best locations".

A Coles executive took this question and denied the decision was made to wipe out competitors.

Later Coles CEO Leah Weckert was asked by Sharp: "Does Coles engage in land banking."

(My colleague Kate Ainsworth has done a great feature here on land banking accusations:  Coles and Woolworths land-banking allegations face scrutiny in final stretch of ACCC's supermarket inquiry).

"I have not seen us engage in and banking behavior," Ms Weckert responds.

"I want to be investing into properties that deliver a return."

More on the history of how Coles and Woolworths grew market share here:

Thanks for your comment Alex.

I guess the line of questioning is about whether consumers might gain short-term but lose out over the long-term.

I am basing this on the inquiry's counsel Naomi Sharp SC asking whether Coles branded or pseudo-branded products might crowd out other products over time.

Of course Coles argues it doesn't.

But others that have submitted to the inquiry have suggested that it might.

The voting has now commenced at the Mineral Resources annual general meeting and the floor is open for questions from online or in person.

The first item of business was the 2024 financial statements and reports of the company — this resolution doesn't require a formal vote from shareholders but questions were still taken.

A question was first asked about why several of Mr Ellison's financial transactions were not shared with shareholders, to which Mr McClements said processes were "not as robust as they should have been".

A second question was asked about why the board has given Mr Ellison 12 to 18 months to stand down given the findings of the investigation.

"A sudden departure was not in the best interest of the company," Mr McClements said.

He indicated the board is sticking with that timeline.

He then skirted around a question regarding the impact of the findings on the stock price, by stating it gives the board an "important inflection point" to "restore trust".

A question from the floor was then taken regarding the governance issue and how it became known to shareholders "through the media" and why they "weren't advised".

Mr McClements said reporting about the issue emerged while they were already investigating and that it was reported differently to how the board saw it.

Koi hand cream, is it a Coles brand?

Yes it is, Coles CEO Leah Weckert admits.

So why don't Coles clearly call out owning this brand on the packaging?

Ms Weckert passes the question to another Coles executive who says when it comes to product packaging the aesthetics are important.

Ms Weckert says in meat, bakery, eggs and milk categories there is a high proportion of sales of Coles branded products.

But health and beauty is an areas where they've struggled to make Coles branding work and why they prefer to use other branding.

She says that's why Koi is the brand name Coles uses and she says she gets a "bit of a thrill" when she goes into a restaurant bathroom and sees one.

She says private label "pseudo brands" also allow them to be more price competitive with Aldi.

She says their pseudo products are meant to be a different offering to branded proprietary products on their shelves, not in competition to them.

"We have large amounts of concentration from large multinational suppliers in many of those categories and many of those .. are far bigger than us and benefit from global reach of their organisations," she told the inquiry.

Ms Weckert says Coles having their own brands in these categories does not compromise the negotiating power of these other big brands.

With my colleague Michael Janda noting in an earlier post that big four bank Westpac has changed its cash rate forecast - pushing the timing of the first RBA rate cut from February to May - it's worth looking at where all the big four now sit with rate forecasts.

Previously, their economic teams believed the first RBA cut would come in February.

Last week NAB pushed back its forecast for the timing of the first cut to May, with Westpac following suit today.

Unlike NAB, Westpac’s economic team expects that while the first cut will take longer than expected to come, the RBA will “front load” the cuts, with the second one to come at the very next meeting in July, but still finishing the cutting cycle at 3.35 by the end of 2025.

"The next round of quarterly inflation data, due out at the end of January, is unlikely to be enough to push the RBA out of its current state of inertia," says Canstar's Sally Tindall.

"The Board will probably want to wait at the very least until the following round of data, due out in April before it commits to cuts."

Here's more of Chris Ellison's address to shareholders at the Mineral Resources AGM, as lodged on the ASX.

"Many years ago, I was a partner in a private company and made an error of judgement with reporting of personal tax.

"I later went on to report it and subsequently paid penalties, interest and tax that was due and payable.

"I deeply regret the impact this has had on our business and our people.

"I want to assure all shareholders, that any personal expenses paid for by the Company were always repaid.

"For 32 years, my focus has been on building a great Australian Company.

"I am proud of the value I’ve created and the changes I’ve brought to the industry, and the return I have provided to MinRes shareholders.

"Looking back, I accept things could have and should have been done differently around corporate governance, but those measures are now in place.

"I’ve made some mistakes along the way; I own those mistakes and take full responsibility.

"I’ve built a great Company, delivered extremely good returns to MinRes shareholders, employed thousands of people, created a great working environment for my employees – and provided huge benefits to Australia.

"We have a very strong Board that will ensure the ethics and governance processes are very strong going forward.

"I support the Board and will continue to manage this great business with all my capability and energy through the transition phase. I look forward to doing so."

Earlier this month, it was confirmed that Mr Ellison would step down but not for the next 12 to 18 months.

Two prospective MinRes board members, Jacqui McGill and Denise McComish, addressed the AGM briefly before current MD Chris Ellison took the lectern.

Mr Ellison appeared nervous as he commenced his address, starting with acknowledgements and then diverting straight into the scandal that has plagued the company this year.

The outgoing boss spoke of his "judgement error" and how he "deeply regrets" the impact his behaviour has had on the business and the company.

He also said the investigation has been a "dark cloud over [his] life" and something he will "live with forever".

Mr Ellison is currently outlining the company's performance this year and new developments it has made.

Courtney Withers is on the ground at the Mineral Resources annual meeting in Perth and brings us this update:

The AGM is being held after the major corporate governance scandal involving the West Australian mining company.

Some shareholders walked into the meeting in Perth's south-east making disgruntled comments — several telling reporters they felt "angry", and one how he felt like he wanted to "throw a punch".

The meeting commenced with MinRes chairman James McClements telling shareholders "you have the opportunity to ask questions and you will be heard".

He acknowledged the heightened interest in this particular AGM but asked shareholders to remain "respectful" in asking questions.

He also noted that the last few months "have been difficult" and that it "wasn't easy getting to the facts".

Mr McClements reaffirmed he would step down from his role as chairman within the next 12 to 18 months.

Here's more from his opening address:

"From time to time, [MinRes MD Chris Ellison] lacked judgement and used company resources for personal matters.

"The board accepts that Chris' intention was never to cause detriment to the company or its shareholders and there were processes in place for amounts to be repaid to the company in a timely manner.

"The board has decided and Chris has agreed, that these practices will not continue…

"There have also been occasions… where Chris lacked the judgement and integrity that we would expect from our managing director.

"This resulted in a range of financial penalties that we felt were appropriate and warranted in the circumstances."

We'll keep you updated on the outcomes of the votes at the AGM, with the Australian Council of Superannuation Investors urging its clients to vote against Mineral Resources' remuneration plan.

You can read more on allegations Chris Ellison has faced here:

The inquiry's counsel, Naomi Sharp SC, now changes questioning at the supermarkets inquiry to product range.

The Coles boss Leah Weckert says there are several new areas they are seeing growth in.

This includes consumer preferences for gluten free and high protein products.

She says pre-prepared ready meals are also becoming more popular for singles and families.

Customers are very much looking for how they shop sustainably and want information on products related to that.

And customers will utilise online and Amazon more, which is why Coles is improving availability of products via its online service. 

Ms Weckert also notes their meal kits for food lovers business QuiteLike is now competing with Hello Fresh and Marley Spoon.

Coles has also recently changed another 20 stores to Coles Local stores, and Ms Weckert says customer satisfaction at those stores has leaped as a result. 

Amazon has sold in excess of a $1 billion of grocery products  with evidence of strong growth.

The Coles boss says Amazon Prime enables free delivery on products and the US giant has invested heavily in automated distribution centres.

Amazon's new robotics distribution centre in Sydney and a new one opening in Melbourne, has allowed it to ramp up delivery to metro areas, Leah Weckert notes.

She says Amazon treats ambient grocery products as loss leaders.

She says Amazon are "priced very competitively" and can use distribution centres for the basis of building broader market share.

Ms Weckert says there's especially price competition against Amazon on products like dishwashing and nappies.

She says there's credible reports from big suppliers that the volume Amazon are selling is a "point of competition to us".

"In the areas they're competing with us... given the growth that we're seeing, and the information that we're seeing come back from suppliers, this is something that we're paying attention to and worry about.

"That is quite disruptive to our business model."

She says "it is very quick and easy" to place an order on Amazon.

Coles monitor Amazon pricing online weekly, especially since Coles expects it will expand its reach overtime.

She says consumers are now cross-shopping across multiple shops.

More on how the big supermarkets are trying to compete with Amazon here:

Westpac has joined a growing number of financial institutions whose economists now do not expect the Reserve Bank to start cutting interest rates until May.

To add some significance to Westpac's change of heart, it comes from chief economist Luci Ellis who, until late last year, was the assistant governor (economic) at the RBA.

While not ruling out an earlier rate cut, Dr Ellis says the minutes from this month's RBA board meeting, released on Tuesday, "suggest that the balance of probabilities has shifted".

"An earlier start in February or March is still possible, but it is no longer more likely than a May start date," she writes.

"A later start date is also a risk scenario, if inflation does not decline as the RBA is currently forecasting, let alone our own marginally more dovish expectation."

She says the change in forecast largely hinges on one key phrase in Tuesday's publication.

"Market participants and other observers have also pointed to the language in the latest meeting Minutes that the Board 'would need to observe more than one good quarterly inflation outcome to be confident that such a decline in inflation was sustainable'," she notes.

"This has been interpreted as saying that the RBA needs to see at least two more quarterly CPI (and more importantly, trimmed mean) outcomes from here before being confident of their forecasts. This is almost certainly how the Board and staff are thinking about the outlook. It suggests that they will wait for longer than we previously believed."

However, Dr Ellis says previous experience shows that the board can change its mind quickly if economic circumstances change or it realises it has made a serious error in its previous forecasts.

"We are mindful, though, that things can pivot quite quickly, and that the RBA's view of the economy looks somewhat more hawkish than we think is warranted," she adds.

"As the minutes highlighted, the RBA's forecasts hang crucially on a relatively bullish view of the potential for consumption growth to pick up as inflation declines and real incomes recover. Our own view incorporates a more modest recovery, noting the relatively subdued response so far to the income boost from the Stage 3 tax cuts."

Dr Ellis says she views risks to the rates outlook as "two-sided".

My Parliament House colleague Tom Crowley had this good summary of the RBA minutes earlier this week.

"Customers use Costco to stock up on toilet paper ... health and beauty items... those items that last a long time," says Coles CEO Leah Weckert.

(Side note, I am guilty of being one of those people who travels to Costco to stock up on toilet paper).

The Coles boss notes people also go for big fresh food items for a family event

She says Costco has done a good job of balancing American lines like peanut butter as well as local Aussie brands.

She says Coles tries to compete with Costco by offering multi-buy items.

Over the course of the past decade Metcash's share of the market has decreased.

"Customers are very very sensitive to price particularly at this point in time," says Coles CEO Leah Weckert.

But Aldi is seen as a significant as a "significant and credible competitor" and she says the German supermarket player has positioned themselves as "the lowest price".

"The vast majority of the population, I believe it's something like 75 per cent of the population, have an Aldi within 10 minutes of them now," she notes.

"They have very broad coverage of our customer base."

"For us on many essential products, you know, they are the price benchmark in the market that we're seeking to meet.

"And they have lots of interesting things in their stores too, which attract customers in.

"They have the special buys down the center aisle, which, you know, it's always surprising who loves to go and shop the special buyers at Aldi."

She says Aldi also have a "unique products" including their"high end chocolate - it is, is very good quality - (and) some of their French cheeses".

"So it's not just basic essentials that they have, but they have a wide range of also more what I describe as higher tier or premium, affluent products as well."

She says it is possible to do a full shop in Aldi but there's less choices between brands.

But, she says, if people are ambivalent about brands, she notes people can very adequately feed a family by going to shop at Aldi.

What is Coles pricing strategy with respect to Aldi?

On core essential items Ms Weckert says "we try to get as close as possible".

"We have certainly found, over time that we have more and more customers that do the, you know, big shop at Aldi to start, and then they use us as a top up shop.

"That's something that we definitely don't want to happen. We want to fully engage our customer. We want to be the destination for a big shop."

The Coles boss says homebrand or exclusive brands that Aldi has tend to be 10 to 40 per cent cheaper than proprietary products.