The Albanese Government is taking decisive steps to combat shrinkflation in supermarkets and the retail sector by strengthening the Unit Pricing Code, making it easier for Australians to make accurate and timely price comparisons.
The initiative aims to protect consumers from the increasingly common practice of shrinkflation, where product sizes are reduced while prices remain unchanged or even increase, effectively misleading shoppers.
To address these issues, the Government plans to introduce significant penalties for supermarkets that violate the Unit Pricing Code. Unit pricing allows consumers to evaluate the cost of products based on volume, weight, or per unit, helping them avoid being misled by unchanged packaging that conceals reduced product amounts.
“These changes are designed to ensure that shoppers can access the best deals at supermarkets, both in-store and online, preventing them from falling victim to stealth inflation on everyday items,” the Government stated.
A recent ACCC Interim Supermarket Inquiry Report revealed that nearly 90% of consumers frequently utilise unit pricing when deciding on purchases. However, the Inquiry also highlighted concerns regarding how supermarkets apply unit pricing, such as the size and font of print on in-store labels and inconsistencies in units of measure across similar products.
To enhance the effectiveness of unit pricing, the Government will consult on improvements to the Code, including:
- Increasing the readability and visibility of unit pricing in stores
- Addressing the inconsistent use of units of measure among supermarkets
- Expanding the scope of retailers covered by the Code
- Establishing clearer prominence and legibility requirements
- Enhancing the use of unit pricing in cross-retailer price comparisons
Additionally, to support consumers in finding the best value, the Government will fund the ACCC to launch a consumer awareness campaign.
Today's announcements build on a series of actions taken by the Albanese Labor Government to secure better supermarket deals for Australians, which include:
- Providing the ACCC with a A$30 million boost to combat market conduct that exacerbates cost-of-living pressures, such as misleading pricing practices and other unfair conduct by supermarkets and retailers
- Initiating consultation on a new mandatory Food and Grocery Code, incorporating all recommendations from Dr. Craig Emerson's review
- Banning unfair contract terms and increasing penalties for breaches of competition and consumer law, marking significant merger reforms in Australia in nearly 50 years
- Collaborating with states and territories to revitalise the National Competition Policy, particularly regarding supermarket planning and zoning
- Supporting CHOICE in releasing its second Albanese Government-funded price monitoring report, providing Australians with accurate data on where to find the cheapest groceries
Prime Minister Anthony Albanese reiterated the Government's commitment to ensuring Australians receive a fair deal at the checkout.
“Tackling ‘shrinkflation’ through stronger unit pricing and new penalties is part of our plan to get a better deal for Australians,” the Prime Minister said.
“We are also making changes to make sure the ACCC is a tough cop on the beat, while also encouraging more competition and making sure there are significant consequences for supermarkets who do the wrong thing.”
Assistant Treasurer Stephen Jones acknowledged the tough economic conditions faced by Australians, asserting that the Government will not tolerate businesses exploiting consumers.
“Misleading practices around pricing are illegal and completely inappropriate. The bar needs to be raised significantly,” the Assistant Treasurer 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.”
Assistant Minister for Competition Andrew Leigh echoed the Government's commitment to fostering a fair supermarket industry for families and farmers alike.
“Competition is the consumer’s friend. We’re working to hold supermarkets to account by providing consumers with the information they need to make the best decisions,” Assistant Minister Leigh said.
“The Albanese Government is committed to helping Australian families save time and money at the checkout.”