Supermarkets could face at least a$10m fine for price gouging

Supermarket giants could be subjected to fines of up to $10m for breaching the Food and Grocery Code of Conduct in new laws aimed at holding the supermarket sector to account. Set to be introduced into parliament on Wednesday, the legislated fines will be the highest corporate penalties under any industry code, which navigates how supermarkets conduct business with their suppliers. Penalties for violating the code will be set at the highest amount calculated at either three times the amount of benefit gained through the offending conduct, 10 per cent of the business’ turnover in the 12 months prior to the conduct, or a flat fine of $10m. The penalties were previously recommended in a review of the code which was conduced by economist and former Labor minister Craig Emerson. The proposed laws will also equip the ACCC with powers to hit supermarkets with infringement notices if the consumer watchdog believes there are reasonable grounds that the business has breached the code. Separately, the government will also be replacing the current code of conduct with a mandatory code from April 1 of next year, which will affect grocers with an annual Australian revenue of more than $5bn, which includes Woolworths, Coles, Aldi and Metcash, which own IGA. Anthony Albanese said supermarkets had been put “on notice”. “Dodgy behaviour that costs Australians will not be tolerated,” he said. “We want to see a fair deal for Australian families at the checkout, and a fair deal for our farmers.” In September, the Prime Minister savaged Coles and Woolworths and said they needed to do better after the ACCC launched legal proceedings against the major grocers following allegations they mislead consumers on price discounts across hundreds of products. It’s alleged both companies hiked prices by at least 15 per cent before advertising the same products at discounted rates which were higher than the original prices. A Coles spokeswoman previously told NewsWire Coles would be defending the ACCC case. Woolworths previously said it would review the claims. Jim Chalmers said the government was serious about stopping supermarkets from negatively impacting families and suppliers. “We know that cost of living pressures are hitting Australians hardest at the checkout,” the Treasurer said. “Our new mandatory Code has strong penalties that tell the supermarkets we’re serious about getting a fair go for families and farmers.” Assistant Minister for Competition, Charities and Treasury Andrew Leigh added that the enforcement measures would benefit shoppers, as well as farmers and suppliers. “We’re cracking down on supermarket misconduct because it will help shoppers at the register, and it will help farmers and suppliers at the negotiating table,” he said. “Labor’s wide ranging competition policy agenda is good for families and farmers. More competition means a more dynamic and competitive economy.”