New anti-price-gouging laws set to kick in on July 1, with Coles and Woolies in the firing line

Coles and Woolworths are in the firing line of new anti-price gouging laws the consumer watchdog says will be another tool it will deploy to keep supermarkets in check.

From July 1, Australia will become the first country in the world to bring in such laws to protect cash-strapped shoppers from suspected price-gouging amid the cost-of-living crisis.

It comes after the Federal Government in December introduced new laws that prohibit large retailers from charging prices deemed excessive when compared with the cost of supply, plus a reasonable margin.

The ban is part of changes to Australia’s food and grocery code of conduct, made mandatory in April 2025, and will be enforced by the competition regulator.

The Australian Competition and Consumer Commission on Friday released new guidelines that outlined how it would monitor compliance and assess whether Coles or Woolworths have engaged in excessive pricing.

But there is no fixed threshold for what is an excessive price for a grocery product under the prohibition. The new rules will apply to retailers turning over more than $30 billion in revenue each year — currently only Coles and Woolworths.

The other two major supermarkets, Aldi and IGA, are below the threshold.

The ACCC said many elements would be considered to determine whether pricing was “significantly excessive” — including shelf life, pricing of the product by rival retailers, seasonal trends, supply chain disruptions or issues with product availability. It will also consider Statewide pricing practices.

“We know that grocery prices continue to be a key concern for households,” ACCC acting chair Catriona Lowe said.

“The excessive pricing prohibition provides us with another tool within our broader toolkit to protect consumers and promote competition in the supermarket sector.

“Our initial focus for the prohibition will be on monitoring Coles and Woolworth’s pricing information to ensure they comply with their obligations.”

The ACCC will prioritise its monitoring on a select group of products, chosen based on consumer and supplier reports as well as information obtained from supermarkets, including on prices, margins and sales revenue.

Coles and Woolworths 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.

Coles reiterated the new laws would place “upward, not downward” pressure on prices.

It said multiple inquires, as well as the ACCC’s final report into the supermarket sector last year — which found no evidence of price gouging by major players — have confirmed higher grocery prices were driven by rising costs such as energy, fuel, insurance, production, freight and distribution.

A Woolworths spokesman said regulations applied to two Australian-owned and operated supermarkets groups, while exempting global retailers, which have far greater scale globally and have a significant and growing market share in Australia.

“We note that no other country globally has adopted this approach,” he said.

“The guidelines also do not clearly define what an excessive price is to enable practical and efficient business compliance.”

The new laws come just weeks after the Federal Court found Coles misled shoppers with illusory discounts on grocery staples like yoghurt, butter and toothpaste. Woolworths is facing a similar case brought by the ACCC, with the judgement reserved.