UPDATE: Australia’s federal government has just announced a new ban on price gouging in supermarkets, sparking outrage from major retailers. The regulation, effective from July 1, aims to limit “excessive pricing” for groceries as families struggle with rising costs.
The Food and Grocery Code of Conduct will now impose severe penalties on supermarkets found in violation, with fines reaching up to $10 million per breach. This move follows reports from the Australian Competition and Consumer Commission that highlighted the substantial profits of supermarket giants like Coles and Woolworths, which have reportedly been among the most profitable in the world.
Treasurer Jim Chalmers stated, “One of the best ways to ease the cost of living for Australians is to help people get fairer prices at the checkout.” He emphasized that the changes aim to provide families with a more reasonable shopping experience.
Coles, which claims to make only $2.43 in profit for every $100 spent, argues that these regulations are misguided. A spokesperson warned, “At a time when the focus should be on easing cost-of-living pressures, these regulations risk doing the opposite.” The company cited rising costs in energy, freight, and labor as the real culprits affecting pricing.
Woolworths echoed these sentiments, cautioning that the new regulations could create unintended consequences, potentially harming consumers. They warned of a “butterfly effect” where shoppers may miss out on deals as the law disproportionately impacts Australian-owned companies while allowing foreign retailers to operate without similar restrictions.
The Business Council of Australia criticized the government for enacting regulations without sufficient evidence, arguing that genuine price reductions require addressing underlying cost pressures rather than imposing new rules. CEO Bran Black stated, “Regulation should be based on evidence,” emphasizing the need for a balanced approach to consumer pricing.
As grocery prices continue to outpace wage growth, this regulatory shift arrives at a critical moment for Australian families. The consumer watchdog’s report indicated that grocery prices surged at more than double the rate of wages between late 2022 and early 2023, attributing some of the increases to additional profits from major grocers.
With the clock ticking down to July 1, all eyes will be on how these new regulations shape the grocery landscape in Australia. Consumers are left wondering whether these measures will truly lead to lower prices or if they will inadvertently contribute to higher costs.
Stay tuned for further updates as this story develops.
