Australia’s supermarket giants will face financial penalties if they overcharge customers as new “price gouging” rules take effect next week.
Starting 1 July, the federal government’s new law will target “very large” retailers turning over more than A$30bn ($20.7bn) annually.
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At present, the threshold applies only to Coles and Woolworths.
For the 2025 financial year, Woolworths reported group sales of A$69.1bn, while Coles recorded A$44.3bn.
The Australian Competition and Consumer Commission (ACCC) will police the new rules, which was outlined in December.
The maximum penalty for every violation will be determined by the greatest of $10m, three times the benefit gained, or 10% of annual turnover.
The legislation does not set a fixed threshold for what constitutes an excessive price for a grocery product.
Instead, the ACCC will evaluate supermarket pricing information alongside “relevant circumstances”, including the cost to supply the product to consumers and determine what is a “reasonable margin” for the supermarket to judge if a product was excessively priced.
To manage enforcement, the watchdog will prioritise its monitoring on a “select group” of products.
The focus areas will be chosen based on consumer and supplier reports, alongside data obtained from supermarkets on prices, margins, and sales revenue.
“We will focus our attention on products where excessive pricing is likely to cause the most harm to consumers,” Catriona Lowe, the acting chair of ACCC, said.
The agency plans to select and publish the initial focus products over the “coming months” for closer examination and said it will release regular updates on its compliance monitoring.
The law comes amid scrutiny over pricing practices in Australia’s grocery sector.
Coles faces penalties after a federal court ruling in May, which said the grocer made false or misleading representations about discounts under its “Down Down” promotion.
Woolworths, Australia’s largest supermarket chain, is also facing ACCC court action over its own Prices Dropped promotion.
