Woolworths and Coles Face World-First Laws to Crack Down on ‘Excessive’ Price Gouging: But Will It Really Stop Rip-Offs at the Supermarket?
- The Australian government is set to introduce world-first laws to tackle ‘price gouging’ by supermarket giants Woolworths and Coles from July 1, 2026.
- The new rules will target supermarkets with revenue over $30 billion, but critics argue they won’t stop prices from rising.
- The ACCC will monitor prices and margins, but experts warn the laws could backfire and drive prices up further.
- Coles and Woolworths have hit back, claiming the laws are unnecessary and will only add to cost-of-living pressures.
The Australian government is cracking down on supermarket price gouging with world-first laws that will target giants Woolworths and Coles. But will the new regulations really stop rip-offs at the supermarket, or will they just drive prices up further?
From July 1, 2026, the Australian Competition and Consumer Commission (ACCC) will be keeping a close eye on the pricing practices of the two supermarket giants, which are the only ones in Australia that qualify as “very large retailers” with revenue over $30 billion.
The new laws will fall under the “excessive price prohibition”, but there’s no fixed threshold for what constitutes an excessive price for a grocery product.
Instead, the ACCC will use a subjective test to determine whether a price is “significantly excessive when compared to the cost to the very large retailer of the supply, plus a reasonable margin”.
But don’t expect prices to fall anytime soon. The ACCC will only investigate prices that are deemed to be excessively high, and even then, it’s unclear what that means in practice.
The ACCC’s acting chair, Catriona Lowe, says the new rules are a response to concerns about grocery prices, which are a key worry for Aussie households.
“We will focus our attention on products where excessive pricing is likely to cause the most harm to consumers,” she said. But critics argue that the laws are a solution in search of a problem.
Coles and Woolworths have both pointed out that multiple inquiries have found no evidence of price gouging, and that higher prices are being driven by rising costs such as energy, fuel, and production.
In a statement, Coles said that for every $100 spent at the supermarket, it makes just $2.43 in profit, or less than 3 cents for every dollar spent.
“At Coles, we know that cost of living remains front of mind for Australians, particularly with the challenges of higher interest rates and the price at the bowser,” a spokesperson said.
“We urge the government to tackle the real drivers of higher grocery prices for Australian families.” Woolworths has also hit back, saying that it remains focused on delivering low prices to Australians and pointing out that it now faces stronger laws than the rest of the world.
Analysis: What This Means for Australia
The new laws may be well-intentioned, but experts warn that they could backfire and drive prices up further. “Increasing regulation is likely to put upward, not downward, pressure on prices,” a Coles spokesperson said.
“At a time when the focus should be on easing cost-of-living pressures, these regulations risk doing the opposite.” Security analysts say that the laws could also create a culture of fear among supermarkets, leading them to increase prices to avoid being accused of price gouging.
“This could have unintended consequences and drive prices up even further,” one analyst warned.
Law enforcement insiders warn that the laws could also be difficult to enforce, particularly given the subjective nature of the “excessive price” test. “It’s going to be a challenge for the ACCC to determine what constitutes an excessive price,” one insider said.
“This could lead to lengthy and costly investigations that ultimately achieve nothing.” Industry observers believe that the laws could also have broader implications for the Australian economy, potentially driving up inflation and reducing competition in the supermarket sector.
As the ACCC prepares to launch its crackdown on supermarket price gouging, one thing is clear: the new laws will be closely watched by consumers, supermarkets, and regulators alike.
Will they succeed in stopping rip-offs at the supermarket, or will they just drive prices up further? Only time will tell.
