Australia to Ban Supermarket Price Gouging in Sweeping Competition Reforms
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Article content(Bloomberg) — Australia will ban supermarket price gouging from July 1 under a new law the government says would protect shoppers from excessive grocery prices charged by major retailers.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentTreasurer Jim Chalmers and Assistant Minister for Competition Andrew Leigh said the changes would make it illegal for “very large” grocery chains to charge prices deemed “excessive” relative to their cost of supply plus a reasonable margin. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article content“This is all about getting a fairer go for families in their weekly shop,” they said in a statement released late Saturday. Article contentArticle contentPenalties would be steep: as much as A$10 million ($6.7 million) per violation, or three times the value of any benefit gained, or 10% of annual turnover if that figure can’t be determined. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe ban forms part of a broader effort to strengthen competition and transparency in the supermarket industry, which has faced sustained criticism amid persistent cost-of-living pressures.Article contentThe reforms follow a long-running investigation by the Australian Competition and Consumer Commission, which found the grocery sector is among the most concentrated in the world, dominated by Coles Group Ltd. and Woolworths Group Ltd. in an effective oligopoly. Article contentProfit LeadersArticle contentThe watchdog reported in March that the major chains, along with ALDI Inc., increased their average product margins over the previous five years, particularly on branded packaged food and household goods. It also said that Australia’s largest supermarket groups rank among the most profitable globally.Article contentThe inquiry highlighted structural advantages enjoyed by the two dominant chains, including preferential access to new store sites and significant bargaining power over suppliers — factors it said limit competition and contribute to higher prices for consumers.Article contentArticle contentThe government also flagged other reforms, including increasing the competition regulator’s funding by more than A$30 million to target harmful or misleading conduct in retail, and consulting on options to strengthen unit pricing rules and tackle “shrinkflation.” Article contentColes said in an email that it’s committed to easing pressure on shoppers, noting that multiple inquiries, including the competition regulator’s own, “found no evidence of price gouging.” Article contentInput CostsArticle contentHigher prices are being driven by rising input costs such as energy, fuel and freight, the company said, adding that Coles makes about A$2.43 in profit for every A$100 spent and warning that increased regulation “is likely to put upward, not downward, pressure on prices.”Article contentWoolworths acknowledged the new rules but is focused on delivering value, with average prices in its food retail business declining for seven consecutive quarters, it said in an email. Article contentThe law is “unprecedented” in targeting only two Australian-owned companies, while “much larger, foreign-owned retailers” wouldn’t face equivalent restrictions, the company said.Article contentThe Australian Retailers Association also opposed the changes. There is no evidence of excessive pricing and the laws risk pushing grocery prices higher by increasing compliance costs and uncertainty, Chief Executive Officer Chris Rodwell said in an email.Article contentTrending Canada's Air Force buys six Bombardier jets for $753 million News 'Why let one person in the States change your life?' For Canadian snowbirds, the stay or go dilemma gets complicated Real Estate What's next for interest rates after Bank of Canada holds fire? 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FP Video News Howard Levitt: Why remote workers keep winning in employment law disputes Work Trump’s tariff revenues fell for the first time since February News