Government pushes bigger fines for supermarket ‘shrinkflation’
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The news: Supermarkets will face larger fines for breaching a code designed to give customers clarity over the price of their products, in the latest Albanese government move to regulate the supermarket industry.
The context: On Wednesday evening, the government announced it will strengthen the Unit Pricing Code in a bid to curb ‘shrinkflation’ — reducing product sizes while maintaining or raising their price.
Unit pricing labels tell customers the price of a product by its volume, weight or per unit.
But an ongoing inquiry into the sector by the Australian Competition and Consumer Commission (ACCC) has been warned that supermarkets use inconsistent units of measurement to price the same products, and use small fonts to label unit pricing.
The government says it will consult on countering both those practices, and whether to expand the number of retailers covered by the code.
It will also introduce “substantial penalties” for supermarkets in breach of the code.
But it has not proposed a requirement for supermarkets to notify customers of changes to product sizes, a move implemented by South Korea in December.
It is the latest in a series of government moves targeting the major supermarkets, which are increasingly unpopular among Australians. Last month, a Roy Morgan survey placed Woolworths and Coles in the top five least trusted brands in the country.
Last month, the ACCC announced it would sue Woolworths and Coles for allegedly running misleading discount promotions on hundreds of products.
It alleges both raised the prices on products, before lowering them and marketing them as a discount.
Last month, Prime Minister Anthony Albanese released the government’s draft mandatory code for the industry, which also includes significant fines for breaches.
And this week, Labor announced an additional $30 million in funding for the ACCC to launch a fresh crackdown on supermarkets and retail stores misleading customers over prices.
What they said: “Misleading practices around pricing are illegal and completely inappropriate. The bar needs to be raised significantly,” Assistant Treasurer Stephen Jones said.
“Australian consumers deserve fair prices, not dodgy discounts. That's why we've empowered the ACCC to act in the interests of consumers and crackdown on dodgy practices immediately.”
The sources: Albanese government press release, Wall Street Journal, SBS News
