The Australian government is setting the tone here by being uncompromising on the consumer right to fair pricing. They would outlaw informal price gouging at grocery stores, if re-elected. The Australian Competition and Consumer Commission (ACCC) undertook a market inquiry into the supermarket sector. Because price gouging is generally not a crime unless specifically prohibited by law, they could not legally prove it. In January of last year, this was spurred on by the federal government directing the ACCC to conduct an inquiry. This probe is the beginning of a larger inquiry into the retail sector. At the beginning of this month, the final report from this investigation was made public. After a year’s worth of hearings, it did call out the need for emergency legislative changes to protect consumers.
The ACCC’s investigation found much, much more that needs to be fixed on both a regulatory and enforcement framework. Despite its inability to conclude whether price gouging is occurring, the ACCC recommended that supermarkets should be compelled to publish pricing information and adhere to “minimum information requirements” for discount promotions. At a minimum, these recommendations are intended to help ensure more transparency and fairness in the often opaque world of pricing strategies in the sector.
Government Proposals for Legislative Change
This is a positive development given that the Labor government has already announced its intention to adopt the ACCC’s recommendations in full. This is a big step to protect consumers by requiring supermarkets to notify consumers when they reduce the size of a package, helping them avoid deceptive pricing practices. In addition to this, Labor has committed to outlaw price gouging so that consumers are not unfairly burnt from excessive charging on essentials.
By the government’s own admission, as outlined by Treasurer Jim Chalmers, it’s all about increasing competition in the market and protecting consumers.
“Our plan helps deliver more competition, fairer prices and better deals for Australians.” – Treasurer Jim Chalmers
As leader of the opposition Labor Party, Anthony Albanese made sure to reiterate this fact loudly. He sought equitable outcomes in pricing that would serve both consumers and producers.
“Australian families deserve a fair price at the check-out and Australian farmers deserve a fair price for their goods.” – Anthony Albanese
Financial Support for Regulatory Enforcement
Now the government is doubling down. Second, it proposes to increase funding for the ACCC by more than $30 million over the next three-and-a-half years. This welcome influx of cash will allow the commission to investigate. It will help them to enforce compliance more effectively nationwide across the supermarket and larger retail industries. The ACCC will receive new funding to enhance its capacity to monitor harmful pricing practices. This will empower them to take swift and definitive enforcement action against bad actors who refuse to comply.
The Albanese government is set to roll out a strong, mandatory food and grocery code of conduct. This commitment will go into effect on April 1. The code promotes fair dealings between supermarkets and their suppliers, complementing the industry’s efforts to further equitable practices.
Impact on Consumers and Retailers
The government’s proposed measures are a huge step in the right direction towards preventing consumers being subject to unfair, excessive, or misleading pricing practices. By requiring more transparency around supermarket pricing and promotions, consumers will have the information they need to make smarter purchasing decisions. These efforts aim to bring fairness to farmers by eliminating their playing field. Equitable market access is important for them to continue their way of life.
The improved regulatory environment is expected to help create a more competitive retail sector, increasing consumer welfare while benefiting producers of biofuels. With these requirements enacted, the federal government is seeking to provide real, meaningful benefits to every layer of the supply chain.
