From 1 July, the supermarket excessive pricing prohibition hands the ACCC new power over what Coles and Woolworths are allowed to charge.
Australia’s new supermarket price gouging laws land on 1 July, and only two retail giants are in the firing line.
The supermarket excessive pricing prohibition slots into the Food and Grocery Code of Conduct and applies to very large retailers turning over more than $30 billion in Australia each financial year. For now, that catches Coles and Woolworths alone.
Supermarket excessive pricing prohibition
- Commences 1 July
- Applies to very large retailers with more than $30 billion in Australian revenue a year, currently Coles and Woolworths
- Maximum penalty per breach is the greatest of $10 million, three times the benefit gained, or 10 per cent of annual turnover
- Pricing records must be kept for at least three years
- Retailers must tell the ACCC within five business days if their very large status changes
Stay up to date with what’s happening in and around Melbourne here.
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A price crosses the line when it sits significantly above what it costs the retailer to supply a product, plus a margin the ACCC considers reasonable. The costs counted run from buying and making goods through to transport, store rent and wages.
The margin is whatever profit is left once every direct and indirect cost is stripped out of the retail price. Reasonable is left deliberately open, weighed case by case rather than set against a fixed figure, which gives the ACCC room to move and the supermarkets room to argue.
The prohibition also runs alongside tighter merger rules for the majors, funding for consumer group CHOICE to track prices, and money for food security in remote First Nations communities. Shoppers who think a very large retailer has priced something excessively can report it to the ACCC, anonymously if they prefer, though the regulator will not chase individual refunds.
For more information, head here.
