Government targets ‘shrinkflation’ in broadening supermarket crackdown

A new phase of the supermarket crackdown is about to be rolled out, with Anthony Albanese saying Australians need “a tough cop on the beat”.

The Albanese government is rolling out the latest phase of its supermarket crackdown, with the country’s consumer rights watch dog being directed to probe “shrinkflation”.

Shrinkflation is where a product’s size reduces but its price stays the same or increases.

Consumer advocacy group Choice has found both Coles and Woolworths guilty of using the practice on some of their homebrand items.

The government’s latest move will strengthen product price rules and introduce big penalties for supermarkets that breach them.

“We are cracking down on supermarkets to help Australians get a fair deal at the checkout,” Prime Minister Anthony Albanese said.

“Tackling ‘shrinkflation’ through stronger unit pricing and new penalties is part of our plan to get a better deal for Australians.

“We are also making changes to make sure the ACCC (Australian Competition and Consumer Commission) 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.”

Prime Minister Albanese says the government is making sure the ACCC “is a tough cop on the beat”. Picture: David Geraghty / NewsWire

The Unit Pricing Code (UPC) sets the rules for pricing products on supermarket shelves, allowing consumers to see cost by volume, weight or unit.

The government will look at improving readability and visibility of unit pricing, making units of measurement universal and expanding the number of retailers covered by the UPC.

Assistant Treasurer Stephen Jones said the government knew “Australians are doing it tough”.

“Misleading practices around pricing are illegal and completely inappropriate,” he said.

“The bar needs to be raised significantly.

“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 latest action follows the government’s announcement earlier this week it was giving the ACCC an extra $30m to help it police supermarket conduct, after the regulator said it was suing Woolworths and Coles for allegedly misleading customers on discounts.

The ACCC is accusing Woolworths and Coles of hiking prices to create the illusion that they dropping them. Picture: NewsWire / Roy VanDerVegt

The ACCC alleged last week both major supermarkets pushed prices up by at least 15 per cent before slapping them with promotional discount stickers often at prices higher than before the hike.

The watchdog said Woolworths did this for 266 products in its Prices Dropped promotion over a period of 20 months, while Coles did it for 245 products in its Down Down promotion across 15 months.

Following the ACCC’s legal action announcement, the Albanese government released an exposure draft of a new mandatory grocery code that could hit major supermarkets with multimillion-dollar penalties for serious breaches.