Retail ‘shrinkflation’ prompts unit pricing crackdown
The government’s latest supermarket sector reforms will see tighter rules and hefty fines introduced to stop unfair pricing tactics.
The government will tighten rules around unit pricing and introduce substantial penalties for non-compliance in a bid to combat “shrinkflation” tactics used by supermarkets and retailers.
It planned to consult on improvements to the Unit Pricing Code including improving the visibility of price tags, expanding the scope of retailers covered and fixing usage inconsistencies.
Prime Minister Anthony Albanese said the government was cracking down on “shrinkflation”, an increasingly common practice of reducing products’ sizes while keeping prices the same or hiking them.
“Tackling ‘shrinkflation’ through stronger unit pricing and new penalties is part of our plan to get a better deal for Australians,” he said.
The Unit Pricing Code is mandated under the Competition and Consumer Act 2010 and sets for which businesses must display unit prices, where, how, and for what products.
It covers grocery retailers that sell items such as bread, butter, eggs, flour, fresh fruit and vegetables, meat, rice sugar and other packaged food.
The proposed changes came after an ACCC interim report on supermarkets found almost 90 per cent of consumers always or often used unit pricing when deciding what products to buy.
But according to the report, released last week, stakeholders expressed concerns about the size and font of print used for in-store labels and the inconsistent measurement units used to price the same products.
Assistant Treasurer Stephen Jones said misleading practices around pricing were illegal and “completely inappropriate”.
“The bar needs to be raised significantly,” he said. “Australian consumers deserve fair prices, not dodgy discounts. That’s why we’ve empowered the ACCC to act in the interests of consumers and crack down on dodgy practices immediately.”
Assistant Minister for Competition Andrew Leigh said the government was focused on ensuring a fair supermarket industry.
“Competition is the consumer’s friend. We’re working to hold supermarkets to account by providing consumers with the information they need to make the best decisions,” he said.
The government has also announced $30 million in additional funding for the ACCC to investigate and stop misleading and deceptive practices by supermarkets and retailers.
It also banned unfair contract terms last year and increased penalties for breaches of competition and consumer law.
Companies guilty of illegal conduct will now face a maximum penalty of $50 million or 30 per cent of their adjusted turnover during the breach turnover period.
The beefed-up regime could apply to Coles and Woolworths, which are currently the subject of a new ACCC lawsuit that alleges they misled shoppers over the price of hundreds of products.
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