Potential models for the reform include the excessive pricing laws established in the EU, the UK, and many US states.
Labor has pledged to outlaw price gouging if re-elected through an excessive pricing regime for supermarkets.
“Australian families deserve a fair price at the checkout and Australian farmers deserve a fair price for their goods,” Prime Minister Anthony Albanese said.
On Jan. 25, 2024, the federal government announced an investigation into the excessive pricing, directing the Australian Competitive Consumer Commission (ACCC) to conduct the inquiry.
According to the report, the three supermarks increased their average profits on products over the last five financial years, particularly for branded household and packaged food categories.
Plan to Outlaw Price Gouging
Potential models for the reform include the excessive pricing laws established in the European Union, the UK, and 30 U.S. states.
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Assistant Minister for Competition Andrew Leigh said it is time for Australians to have the same excessive pricing protections as overseas consumers.
A task force, including experts from the ACCC and the Treasury, would be established to advise on introducing the reform.
The task force would be expected to report to the government within six months with a proposed course of action.
“We’re delivering a better deal for families at the checkout and a better deal for farmers at the farm gate,” Treasurer Jim Chalmers said.
“Our plan helps deliver more competition, fairer prices and better deals for Australians.”
Recommendations of ACCC and Other Political Parties
The ACCC recommended that large supermarket chains publish prices online and established the importance of new merger laws and specific treatment of supermarket acquisitions.
Additionally, the ACCC advised that supermarkets need to be more transparent about weekly tendering—the process of choosing a company to supply goods—and rebates with suppliers.
The report also found grocery prices are higher in remote areas, although this is likely due to logistical costs, and some stores do not provide price labels.
The ACCC recommended all stores display prices in-store and advised the establishment fair trading bodies to monitor price display and complaint information.
The Coalition and Greens intend to address supermarket price gouging with divestiture laws, which mandate a company sell off parts of its business.
“It’s time that the interests of people took precedence over the profits of corporations,” McKim said.
