Proposed introduction of excessive pricing prohibition for supermarket and grocery retailers

Submission Date: 6 November 2025

The Competition and Consumer Law Committee of the Business Law Section of the Law Council of Australia (the Committee) welcomes the opportunity to comment on Treasury’s consultation paper ‘Introducing an excessive pricing prohibition for supermarkets: Consultation paper’ (the Consultation Paper).

In summary, the Committee has considered the proposed excessive pricing prohibition and strongly cautions against its introduction for the following reasons:

1. Those in support of the proposed prohibition suggest that if the major supermarkets are pricing competitively then the supermarkets should have no concerns about the proposed prohibition. This is a significant oversimplification of the issues and disregards the fact that regulatory overreach, particularly when it intervenes in pricing outcomes, can distort investment signals and raise barriers to entry and expansion, which ultimately reduces competition. This is the opposite of what the proposed reforms are designed to achieve.
    
2. Pricing regulation in any form reflects a major intrusion into market dynamics and ought not to be introduced unless there is a clear and demonstrable need for it. In this case, the ACCC recently completed an in depth 12-month inquiry into pricing and competitiveness in supermarkets. It found that cost price increase requests from suppliers were the predominant reason for increases in retail grocery prices and that it expected grocery prices to stabilise as input cost increases continued to moderate. Significantly, the ACCC did not recommend any regulation of supermarket pricing but, rather, measures to lower barriers to entry such as simplification and harmonisation of planning and zoning laws.
    
3. While the Government has explicitly stated that it has had regard to international approaches to excessive pricing regulation in the UK, EU and South Africa,¹ these jurisdictions do not employ specific prohibitions on price gouging at all, but instead explicitly include ‘excessive pricing’ (or equivalent terms) as abuses of market power. Australia already has an equivalent prohibition in the Competition and Consumer Act 2010 (Cth) (CCA), being the prohibition against misuse of market power.
    
4. The Committee does not consider that the proposed prohibition would meaningfully strengthen or expand the existing protections under the CCA. Rather, it will introduce uncertainty and ambiguity as to what amounts to excessive supermarket pricing and may deter businesses from entering or expanding their supermarket operations in Australia.

^{1 Commonwealth of Australia, Department of Treasury, Introducing an excessive pricing prohibition for supermarkets – Consultation paper (October 2025), page 7.}

Last Updated on 28/11/2025

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