Anthony Albanese says supermarkets price gouging consumers are “taking the piss” after promising that a re-elected Labor government will outlaw the act by the end of the year, in his the first big policy announcement of the campaign.
The prime minister announced on Sunday that Labor will act on recommendations made by the Australian Competition and Consumer Commission (ACCC) to improve transparency about supermarket prices, promotions and loyalty programs.
Labor will also establish a taskforce to provide advice on introducing an “excessive pricing regime” for supermarkets, which would be enforced by the ACCC.
Albanese indicated supermarkets could be liable for “heavy fines” but said the consumer watchdog would be tasked with finding the best model to determine what constitutes price gouging.
In a press conference on Sunday, the prime minister quoted European laws which define price gouging as “unfair and excessive” if there is “no reasonable relation of economic value of the product supply” before providing his interpretation of it with a “very Australian colloquialism”.
“Price gouging is when supermarkets are taking the piss of Australian consumers. That’s what price gouging is. Everyone else out there knows. Consumers know. We’ll take action,” Albanese said.
Asked whether supermarkets were currently “taking the piss”, he said: “I think there are absolutely examples where they have been. What’s important isn’t that, I think that, it’s that Australians know that.”
The taskforce, which will include experts from Treasury, the ACCC and other market and regulatory bodies, is expected to report back to the government within six months with a proposed course of action. However, few details were provided about what the pricing regime might entail.
The Coalition criticised the Labor government for not acting sooner, with energy spokesperson Ted O’Brien describing it as a “marketing stunt”. Peter Dutton described it as “wet lettuce” and “basically another recipe for failure”, claiming groceries had risen by 30% – a figure believed to be taken from a Daily Telegraph secret shopping study.
Earlier, the Coalition spokesperson James Paterson said the opposition would be “very happy” to make price gouging illegal.
“The truth is, this is an insulting policy to the Australian people. It’s their fifth committee or review into supermarket prices. If it was such a good idea, why didn’t they do it three years ago,” Paterson said on ABC’s Insiders.
The Greens and the Coalition recently called on Labor to introduce divestiture laws that would forcibly break up the supermarket chains as punishment for price gouging.
Paterson said the opposition’s plan for targeted divestiture laws would be a better plan to target the issue.
“If [supermarkets are] abusing their market power, if they’re stifling competition, we can have that [divestiture] last resort power, which would be very tough incentive,” he said.
The Nationals leader, David Littleproud, said the opposition would impose $2m on the spot fines and give the ACCC the power to conduct random audits on major supermarkets.
“If we are going to continue to just do more reporting, we will get the same consequences. We have got to change culture and the only way to do that is with a deterrent that the Coalition will introduce,” he said.
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Australia has competition laws to prevent companies from abusing their market power but they do not address excessive pricing. It is understood Labor will look at excessive pricing laws in the European Union, the UK and in 30 US states as potential models for their reform.
The assistant minister for competition, Andrew Leigh, said: “It’s time Australians had the same protections from excessive pricing as consumers overseas.”
It comes after the ACCC’s inquiry into supermarkets released its final report on 21 March, which found Coles, Woolworths and discount rival Aldi, were among the most profitable supermarket chains in the world.
Grocery prices were found also to have risen sharply over the past five years, which was mostly attributed to increased business costs, although the report also found that the supermarkets had increased product prices and profit margins during this period.
According to the ACCC, this meant “at least some of the grocery price increases have resulted in additional profits”.
The ACCC urged the government to force Coles, Woolworths and Aldi to publish all prices on their websites and allow online comparison tools to access the data to inform shoppers. It also recommended greater transparency measures for suppliers.
To this end, Tuesday’s budget also included $2.9m over three years to “help suppliers stand up to the big supermarkets”.
The treasurer, Jim Chalmers, said Labor would ensure “Australians aren’t being treated like mugs”.
“We’re delivering a better deal for families at the checkout and a better deal for farmers at the farm gate,” he said.
With cost of living emerging as a central issue in the election, Labor is touting Sunday’s announcement as part of its broader efforts to address the issue, along with tax cuts, energy bill rebates and cheaper medicine.
