Shopping crackdown outlined
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Supermarkets could pay millions for overcharging consumers while claiming a discount.
The Federal Government is attempting to reform the grocery sector, releasing a draft of the Mandatory Food and Grocery Code of Conduct for public consultation.
The Code is intended to replace the current voluntary code on 1 April 2025 and will impose stricter rules on major retailers including Coles, Woolworths, Aldi, and Metcash.
These supermarkets will face multi-million-dollar penalties for serious breaches.
The draft legislation is accompanied by proposed amendments to the Competition and Consumer Act 2010, introducing higher maximum penalties for code breaches.
The government says its goal is to create a fairer market, benefiting Australian suppliers and shoppers.
The Australian Competition and Consumer Commission (ACCC) will play a central role in enforcing the Code and managing an anonymous complaints pathway for suppliers and whistle-blowers.
Assistant Minister for Competition Andrew Leigh emphasised that the Code strengthens supplier protections by introducing enhanced dispute resolution processes and new obligations to shield suppliers from retribution.
“The Code increases protections for suppliers … complemented by the creation of an anonymous supplier and whistle-blower complaints pathway,” he said.
This week’s release of the exposure draft coincides with legal action launched by the ACCC against Coles and Woolworths.
The watchdog has accused both supermarkets of misleading discount pricing, claiming they raised product prices temporarily before promoting them under banners like ‘Prices Dropped’ and ‘Down Down’.
ACCC chair Gina Cass-Gottlieb criticised the supermarkets for allegedly creating “illusory discounts” on products ranging from chocolates to sanitary items.
“We allege the new ‘Prices Dropped’ and ‘Down Down’ promotional prices were actually higher than, or the same as, the previous regular price,” she says.
Coles faces 245 breaches of consumer law, while Woolworths is accused of 266 breaches.
Penalties for these violations could be up to three times the value of the financial gain.
The proposed changes to the Food and Grocery Code would adjust the penalties, including fines of up to $10 million for future breaches.
In addition to these enforcement actions, the Albanese Government has funded CHOICE for a three-year series of quarterly reports on supermarket prices.
The latest report confirmed that Aldi once again offered the cheapest average basket, with an average price of $50.79, compared to $66.22 at Coles and $68.37 at Woolworths.
Prime Minister Anthony Albanese commented on the report, saying; “We are doing everything we can to ensure Australians are paying a fair price at the checkout and Australian farmers are getting a fair price for their goods”.
Public submissions on the draft of the Mandatory Food and Grocery Code are open until 18 October 2024, while submissions for the amendments to the Competition and Consumer Act close on 4 October 2024.