Business
Coles and Woolworths Face $10M Fines Under New Price Gouging Ban
A new survey has found four in five Australians believe they are being ripped off by big supermarkets. In response, the federal government is implementing tough new legislation from July 1 that will outlaw…
A new survey has found four in five Australians believe they are being ripped off by big supermarkets. In response, the federal government is implementing tough new legislation from July 1 that will outlaw price gouging, with penalty marks for retailers that charge more than reasonable margins.
Key Highlights
- 72% of Australians feel supermarkets are gouging prices right now
- From 1 July 2026, there will be new laws against excessive pricing
- Retailers will face fines of $10 million, three times the benefit or 10% of turnover
- Average weekly grocery bills formerly sat at $185 three years ago but have grown to $206
Record Distrust at the Checkout
A finder survey showing the relationship between Australian consumers and the Big Two supermarkets is at a seemingly even deeper trust crisis. 72% of respondents say both Coles and Woolworths had been, and still are, price gouging, according to the report. One in three Aussies count the supermarket shop among their top three most stressful expenses, with the average household spending $206 a week on groceries. Finder’s expert Sarah Megginson noted that seeing billion-dollar profits while essential items like butter cost $7 have built the impression something is off.
The July 1 Crackdown
The main reason for the government’s intervention is to ensure that checkout prices should not only reflect actual supply cost, but also a reasonable margin. Effective July 1, most retailers with an annual revenue over $30 billion will prohibit charging excessive prices. It is this rule that nets Coles and Woolworths but not smaller players such as Aldi. It will put the onus on the Australian Competition and Consumer Commission (ACCC) to track supply chain costs to prove when a price rise, is unfair rather than merely reflecting inflation.
Penalties for violating these new rules (among the most severe in Australian consumer law) are also high. The price can be greater than $10 million, three times the profit earned by the unfair price, or 10% of total company revenue for a given year. This forms part of a wider effort to establish legislation compulsory Food and Grocery Code of Conduct allowing the ACCC to intervene with greater authority in protecting families from being exploited each week at IGA or Woolies.
The Road to Fairer Pricing
While the supermarkets maintain higher prices due to increased energy and shipping costs, experts say the new laws will require some greater transparency. The government is aiming the cap to be set so effectively that pricing remains within a reasonable margin, hoping grocery bills fall as wider inflationary pressures dissipate. As July 1 approaches, the ACCC has been swift to signal to major retailers that the supermarket price gouging era is over.
FAQs
- Which supermarkets are affected?
With retailers above the $30 billion revenue threshold only covered, that includes Coles and Woolworths for now.
- How much super markets can be fined?
This means that fines could be as high as $10 million per breach or up to 10% of the company’s total annual turnover.
- If inflation is slowing down, then why isn't the price falling?
Consumer experts say supply costs have relaxed in some sectors but supermarkets have been sluggish in passing savings on, resulting in new gouging laws.
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