Prime Minister Anthony Albanese says alleged misconduct from Coles and Woolworths conduct ‘unacceptable’

Prime Minister Anthony Albanese says shoppers “don’t deserve to be treated as fools by the supermarkets” as he launched a new crackdown on the retail giants – including the threat of multi-million dollar fines.

Mr Albanese unveiled a draft mandatory food and grocery code just after the ACCC announced twin lawsuits against Coles and Woolworths for allegedly misleading customers through discount pricing claims on hundreds of everyday products.

Mr Albanese said the alleged conduct, if proven, was “completely unacceptable”.

“This is not in the Australian spirit,” Mr Albanese said.

“Customers don’t deserve to be treated as fools by supermarkets.

“They deserve much, much better than that.”

Former Labor minister Craig Emerson’s grocery code review earlier this year recommended shifting from a voluntary to a mandatory regime.

Opening consultation on an exposure draft of the new code on Monday, Mr Albanese said it was clear the voluntary code “had not been good enough”.

Mr Albanese said under laws to be introduced to Federal Parliament this year, retailers including Aldi, Coles, Woolworths and Metcash would face the threat of multi-million-dollar fines for serious breaches.

The code would also beef up protections for suppliers with tougher dispute resolution arrangements, and new obligations to protect them from retribution.

“We know there’s more to do, but my Government wants to make sure that Australian consumers get a fair go,” Mr Albanese said.

“When families are doing it tough, they need a Government that’s on their side. But they also need a tough consumer cop on the beat.

The Prime Minister said the Government took the allegations levelled against Coles and Woolworths “very seriously”.

“Shoppers are on the hunt for discounts when they do their weekly grocery shop because every dollar matters when people get to the checkout, advertised discounts need to be genuine each and every time,” he said.

“Specials need to be real because household budgets are tight.”

The ACCC’s allegations centre on Coles’ long-running “Down, Down” campaign and Woolworths’ “Prices Dropped” pitch, which were both promoted as a lifeline to families struggling to make ends meet as inflation pushed up prices on everyday items.

The claims involve 266 products for Woolworths at different times across 20 months, and 245 products for Coles at different times across 15 months, amounting to “tens of millions” in sales from which both chains “derived significant revenue”.

The allegations relate to products sold in store and online by each of Woolworths and Coles at regular long-term prices which remained the same, excluding short-term specials, for at least six months and in many cases for at least a year.

The ACCC claims the products were then subject to price rises of at least 15 per cent for brief periods, before being placed in the Prices Dropped and Down Down promotions at prices lower than during the price spike but higher than, or the same as, the regular price that applied before the price spike.

The alleged conduct coincided with the skyrocketing inflation that the Reserve Bank used to justify its 13 consecutive interest rate hikes.

Mr Albanese bought into suggestions the supermarkets’ actions contributed to the bank’s decisions.

“When you’re charging more for products than you should, it of course has an inflationary impact by definition,” he said.

Consultation on the draft mandatory code is open until October 18.