The ban will prohibit very large retailers from charging prices that are excessive when compared to the cost of the supply plus a reasonable margin.
The new ban on excessive pricing of groceries for consumers in the Food and Grocery Code is now law and will come into effect on 1 July 2026.
This will fix a key gap in Australia’s competition and consumer protection framework and provide a safeguard for consumers.
The Australian Competition and Consumer Commission (ACCC) found in its Supermarkets inquiry that Coles and Woolworths have limited incentive to compete vigorously with each other on price and that their dominance of the sector seems set to continue.
If Coles and Woolworths breach these new price gouging laws, the maximum penalty per contravention is the greater of: $10 million; three times the value of the benefit derived, or, if that value cannot be determined; 10 per cent of the company’s turnover during the preceding 12 months.
The ACCC will be responsible for policing the excessive pricing regime.