Consumers will be given added protection from price-gouging at the checkout, but Australia's major supermarkets have a six-month reprieve before the laws kick in.
The federal government has introduced rules to limit "excessive pricing of groceries" with changes to Australia's Food and Grocery Code of Conduct, which was made mandatory in April.
The move against price-gouging — foreshadowed before a snap consultation period earlier in the year — takes effect on 1 July.
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.
"This is all about getting a fairer go for families and pensioners at the checkout," Treasurer Jim Chalmers told Sky News on Sunday morning.
"We're delivering what we promised when it comes to cracking down on price gouging."
In March, the Australian Competition and Consumer Commission found the near-duopoly enjoyed by Coles and Woolworths gave them little incentive to compete vigorously, noting they were among the most profitable supermarkets in the world.
But the report never directly accused the supermarkets of gouging customers, something both Coles and Woolworths have denied.
It did not make a finding on, or seek to define whether supermarket prices were "excessive", since high margins are not prohibited under consumer laws.
From July, supermarkets could face fines of $10 million per breach, three times the value of the benefit derived or 10 per cent of the company's turnover during the preceding 12 months.
The commission will be responsible for policing the new regime.
Chalmers said the changes gave the competition watchdog the powers it needed to hold supermarkets to account.
"One of the best ways to ease the cost of living for Australians is to help people get fairer prices at the checkout and that's what this is all about," he said in a joint statement.
The consumer watchdog's report found grocery prices rose at more than double the rate of wages between late 2022 and early 2023, attributing at least some of those rises to additional profits for Coles, Woolworths and Aldi.
A Woolworths Group spokesperson said in a statement to SBS News that they acknowledge the tabling of the regulation, however the law is "unprecedented by targeting only two Australian-owned companies, creating an uneven playing field".
A Coles spokesperson also said that "carving out large multinationals and other major players from this legislation does not reflect how Australians shop and risks weakening competition".
While the watchdog acknowledged the costs of doing business had risen, the supermarkets had increased their profit margins despite the disruption to supply chains caused by the COVID-19 pandemic, the report said.
Aldi's growth had acted as a handbrake on the duopoly, but the commission noted the German discount chain did not compete directly with them on all product lines.
Share
