New Australia Supermarket Price Gouging Law Starts July 1, 2026
A new Australian law effective July 1, 2026, aims to curb supermarket price gouging by limiting excessive pricing at major retailers. Enforced by the ACCC, the regulation targets chains like Coles and Woolworths as part of a wider effort to address rising grocery costs.
Highlights
- •New legislation targeting supermarket price gouging begins in Australia on July 1, 2026.
- •The law applies to retailers with over A$30 billion in annual revenue, primarily Coles and Woolworths.
- •The ACCC will enforce the rules, with significant financial penalties for excessive pricing.
- •The regulation acts as one part of a broader government strategy to lower grocery costs.
Australia is set to implement a significant new regulation targeting supermarket price gouging, which officially takes effect on July 1, 2026. This legislative measure is specifically designed to address concerns regarding the cost of living by placing stricter controls on large retail grocery chains.
Under the new rules, any major supermarket chain reporting annual revenue exceeding A$30 billion will be prohibited from setting prices for grocery items that are deemed excessively high. The legislation mandates that pricing must reflect the actual cost of supply plus a reasonable profit margin. At present, this provision directly impacts industry giants Coles and Woolworths, which hold a combined market share of more than two-thirds of the country’s grocery sales.
Regulatory Oversight and Market Implications
The enforcement of this policy falls under the jurisdiction of the Australian Competition and Consumer Commission (ACCC). Entities found in breach of these guidelines will face substantial financial penalties. The move follows a period of intense scrutiny regarding the pricing strategies of major retailers, including recent legal challenges against Coles for misleading promotional activities, and ongoing proceedings involving Woolworths.
The introduction of the law marks a fulfillment of the Labor government's pre-election commitment to combat rising consumer costs. While similar supermarket price gouging regulations exist in other regions—often limited to emergency scenarios like the COVID-19 pandemic—Australia’s approach is unique by embedding these rules directly into the existing Food and Grocery Code. This targeted strategy aims to specifically curb the dominance of major supermarkets.
Determining what constitutes an "excessive price" or a "reasonable profit margin" remains a complex challenge for regulators. Because supermarkets manage vast inventories with fluctuating supplier costs, the task of isolating a single product's margin is difficult. Treasury officials have suggested that authorities will look toward existing competition frameworks in the European Union and the United Kingdom for guidance on interpreting these new standards.
Impact on Australian Consumers
While the regulation is a notable step, experts note that it is not a comprehensive solution to all cost-of-living challenges. Instead, it forms part of a broader suite of government initiatives, including updated merger laws that require larger retailers to notify the ACCC of certain business acquisitions, and increased funding for consumer advocacy groups like CHOICE to enhance price transparency. Ultimately, the new law serves as a firm notice to large supermarket chains that their commercial practices remain under strict observation, creating new incentives for fairer pricing strategies across the retail sector.
