Oligopsony in Australia: How Buyer Power Shapes Markets (2025)

When most Australians think about market power, their minds jump to monopolies—those single, mighty sellers that dominate supply. But in 2025, an equally important but less discussed force is at work: oligopsony. This market structure, where a handful of buyers wield disproportionate power over many sellers, is quietly shaping prices, wages, and the choices that businesses and consumers face every day.

What Is Oligopsony? A Market Where Buyers Rule

Oligopsony describes a situation where a small number of buyers control the demand side of a market, giving them outsized influence over suppliers. Unlike monopoly (one seller, many buyers) or oligopoly (few sellers, many buyers), here it’s the buyers—often large companies or government agencies—calling the shots. This dynamic is especially prevalent in sectors like agriculture, mining, and even the gig economy.

• Examples: Major supermarket chains (like Woolworths and Coles) buying from thousands of Australian farmers.
• Large meat processors purchasing livestock from independent graziers.
• Global tech platforms hiring freelance gig workers in Australia.

When a few buyers dominate, they can push down prices, set tough terms, and influence which suppliers survive. For smaller players, that often means less bargaining power and thinner margins.

Australian Industries Under the Oligopsony Lens

In 2025, several Australian sectors are under scrutiny for oligopsonistic practices—sometimes quietly, sometimes in the headlines.

Supermarkets and the Food Supply Chain

The supermarket duopoly is a classic case. Woolworths and Coles buy the vast majority of fruit, vegetables, and packaged goods. For many growers and food manufacturers, these two giants are the main route to market. The 2025 review of the Food and Grocery Code of Conduct has brought renewed calls for reforms, as suppliers report ongoing issues with price negotiations, contract fairness, and late payments.

• Recent ACCC investigations highlight how concentrated buying power can squeeze suppliers, even as consumer prices rise.
• Smaller brands and farmers face tough choices: accept the supermarkets’ terms or risk missing out on shelf space entirely.

Livestock and Agriculture

Australia’s beef and lamb producers have long contended with a handful of major processors and export buyers. In 2025, the National Farmers’ Federation continues to push for more transparent pricing and fairer contracts. Despite global demand for Aussie meat, local graziers often see limited benefit, as processors set prices that leave little room for profit.

The Gig Economy and Freelance Platforms

Digital platforms like Uber, Deliveroo, and Airtasker have created new forms of oligopsony. In 2025, gig workers and freelancers are rallying for better pay and protections, as a small number of platforms mediate access to most customers. The federal government’s Fair Work Legislation Amendment Bill, enacted in late 2024, now gives gig workers the right to collective bargaining—an attempt to redress some of the buyer-side power imbalance.

2025 Policy Trends: Regulating Oligopsony Power

The conversation around oligopsony is heating up in Australian policy circles. Here are key developments this year:

• Stronger ACCC Enforcement: The Australian Competition and Consumer Commission is ramping up investigations into unfair buying practices, especially in food and agriculture.
• Mandatory Codes of Conduct: The Food and Grocery Code of Conduct is being strengthened to give suppliers greater protections and improve dispute resolution.
• Collective Bargaining Rights: The new Fair Work legislation allows gig workers and small suppliers to negotiate collectively, aiming to level the playing field.
• Transparency Initiatives: Several states are trialling mandatory price reporting in agricultural markets to help farmers benchmark and negotiate more effectively.

These reforms are a direct response to the recognition that unchecked oligopsony can stifle innovation, harm small businesses, and ultimately reduce consumer choice.

Why Oligopsony Matters for Everyday Australians

At first glance, oligopsony might seem like an abstract economic concept. But its impact is real and immediate:

• It affects the prices you pay at the supermarket—and what makes it onto the shelves.
• It shapes the livelihoods of Australian farmers, producers, and gig workers.
• It influences the diversity of products and services available to consumers.

As regulatory scrutiny grows in 2025, expect more headlines—and hopefully, fairer outcomes—for the many small suppliers who keep Australia’s economy moving.