Prime Minister Anthony Albanese has pledged to crack down on price gouging by supermarkets, as he seeks to convince voters that Labor will address soaring grocery costs if he is reelected.
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In a move aimed at neutralising Opposition Leader Peter Dutton's attacks blaming his government for the cost of living, Mr Albanese announced on Sunday that he will ban the practice - whereby companies take advantage of a lack of competition to hike prices - if he wins a second term.
"Labor will make price gouging by supermarkets illegal, because Australian families deserve a fair price at the checkout and Australian farmers deserve a fair price for their goods," Mr Albanese said.
He also promised to implement key recommendations of the competition watchdog's supermarkets inquiry, aimed at improving transparency about prices, price trends and promotions and loyalty programs - including tackling so-called "shrinkflation", when products become more expensive through the use of smaller packaging.
The Australian Competition and Consumer Commission did not mention price gouging in its report, published last week, but found the nation's supermarkets were highly profitable by international standards.
Mr Albanese told ABC Insiders on Sunday that supermarkets would be hit with "heavy fines" if they breached the promised new laws.
"People know when they are being ripped off," he said.
Asked about the absence of evidence of price gouging in the ACCC inquiry report, despite rising prices, and what would constitute a breach, the Prime Minister said: "There is a certain amount of profit that is too much."
Mr Dutton on Sunday dismissed Mr Albanese's promised price gouging ban, saying it would not bring down grocery prices, while Greens leader Adam Bandt immediately claimed credit for the commitment - although it does not appear to mirror the minor party's policy.
The minor party has declared the supermarket duopoly will be a key focus for its MPs who could hold the balance of power if voters elect a minority Labor government.
The Labor announcement on day two of an election campaign being fought on the cost of living seeks to persuade voters that the Albanese government is committed to helping Australians doing it tough and holding big business to account.
Mr Dutton, who has pledged to give the ACCC new "last resort" divestiture powers to break up the supermarket giants, used his budget-in-reply speech on Thursday night to ramp up his attacks on the government over high grocery prices.
The Labor plan is to set up a taskforce led by the ACCC, along with Treasury officials and other experts, to advise the government on the best approach to legislating a ban on price gouging by supermarkets in Australia.
This would include advising on the appropriate definition of price gouging and the penalties that would apply to breaches, looking at options from overseas jurisdictions including the European Union, United States and United Kingdom.
The Greens introduced a bill to the Senate in September to amend consumer laws and make price gouging illegal, defining price gouging as "conduct that results, or is likely to result" in goods or services being priced excessively. It was defeated in October.
The defeated Greens price gouging bill would have applied to all corporations with "a substantial degree" of market power that turned over at least $10 million a year - not just supermarkets.
It said determining if pricing was "excessive" should have regard to what would be considered a "competitive" price, being that which would be charged if the company did not have "a substantial degree" of market power.
Mr Albanese also pledged to implement key recommendations of the ACCC inquiry report, including forcing supermarkets to publish pricing information and comply with minimum disclosure requirements when promoting specials, such as time frames used to calculate advertised reductions.
The commitment includes compelling supermarkets to publish a notification when making changes to package sizes when this disadvantages shoppers, and making Coles and Woolworths provide regular disclosures to loyalty program members about their spending and points accrual.
Other ACCC recommendations that form part of Labor pre-election pledge are bringing forward a review of the mandatory unit pricing code, which specifies how prices must be displayed, and for Coles and Woolworths' loyalty programs to be subject to a review every three years.
The government has accepted in principle all 20 recommendations of the ACCC report, which also outlines proposed law changes to stop supermarkets from treating suppliers unfairly.
Mr Albanese has previously committed to slapping the big supermarkets with fines hefty fines if they breach the food and grocery code, which his government made mandatory on April 1.
