Australia’s Federal Government will ban price-gouging by major grocery retailers from next month under new rules for large supermarket operators including Coles and Woolworths.
The measures will prevent large supermarket operators from setting prices above supply costs by more than a “reasonable margin”.
The Australian Competition and Consumer Commission (ACCC) will supervise compliance.
Penalties for breaches will be set at a high of A$10m ($6.8m), three-times the financial gain from the breach, or 10% of the retailer’s annual turnover in the previous 12 months.
The pricing rules form part of a broader competition reform package.
This package includes changes to the Unit Pricing Code aimed at addressing shrinkflation and adopts ACCC recommendations on transparency, promotional practices and loyalty schemes.
In a separate change, the Food and Grocery Code will move from a voluntary arrangement to a mandatory framework, with substantial financial penalties for serious breaches.
The government is allocating more than A$30m to the ACCC to pursue harmful or misleading conduct in the supermarket and retail sectors.
Another A$2m in grants will support the Food and Grocery Code Education Programme for fresh produce suppliers, which is intended to help those suppliers in their dealings with major retailers.
Separate funding has also been assigned to consumer advocacy group CHOICE to expand public access to supermarket pricing data.
The package is described as a response to what the government characterises as artificially elevated grocery prices, with the stated aim of improving competition and fairness in Australia’s supermarket sector.
Separately, the ACCC this month told four major online retail platforms – Amazon, eBay, Kogan and Fruugo – to remove magnetic chess-style games that pose a fatal risk to children if the small magnets are swallowed.
The regulator’s action covered toy listings containing small high-powered magnets, which have been under a permanent prohibition in Australian Consumer Law since 2012.
