The Albanese Government has introduced new legislation aimed at curbing supermarket price gouging, following through on a central election promise to address the cost-of-living crisis gripping households. The laws, set to impose heavy fines on major chains like Coles and Woolworths if they are found inflating prices unfairly, mark one of the most aggressive interventions in the sector in decades.
The Australian Competition and Consumer Commission (ACCC) has long raised concerns about “shrinkflation,” where product sizes are reduced but prices remain the same, and about opaque loyalty schemes and misleading promotions. With Coles posting a $1.08 billion profit in 2025 and Woolworths recording $1.4 billion, critics argue consumers have been left shouldering the burden of record supermarket earnings while wages stagnate. The new laws seek to rebalance the playing field by boosting transparency, penalising exploitative practices, and giving watchdogs the teeth to act.
Why the Crackdown Matters Now
For months, households have felt mounting pressure at the checkout. The government’s move is not just symbolic but reflects growing voter frustration. Inflationary pressures and global supply chain shocks have driven up costs, but shoppers are increasingly unconvinced that retail giants are passing on savings when conditions improve.
Prime Minister Anthony Albanese, speaking during the April election campaign, vowed to outlaw excessive pricing and establish a dedicated taskforce within the ACCC to monitor compliance. By tabling this bill, the government hopes to demonstrate its willingness to translate rhetoric into action. It also seeks to answer critics who argue that Canberra has been slow to address monopolistic tendencies in the food retail sector.
- The ACCC report earlier this year did not confirm a strict duopoly but flagged the high concentration of the market dominated by Coles and Woolworths.
- ALDI, a smaller competitor, reported a $402 million profit in its most recent filing, underscoring how profitability is not limited to the largest players.
- The new legislation will expand oversight of pricing tactics, loyalty schemes, and promotional campaigns.
- Crucially, the reforms will give regulators the authority to impose substantial penalties for proven cases of gouging.
While consumer advocacy groups have welcomed the move, supermarket executives are preparing for a tougher regulatory climate. Industry insiders note that tighter controls could reshape pricing strategies, promotions, and supplier relationships across the board.
What the New Laws Aim to Do
The Competition and Consumer Amendment (Make Price Gouging Illegal) Bill represents the second major attempt in recent years to tighten supermarket oversight. The legislation targets three major areas: transparency, accountability, and penalties.
First, transparency measures will require supermarkets to clearly disclose changes in product size, loyalty program conditions, and discount structures. The aim is to ensure consumers understand whether they are genuinely receiving value. Second, accountability mechanisms will be reinforced by granting the ACCC expanded monitoring powers, supported by a dedicated taskforce. Finally, penalties will act as deterrents: fines could run into the tens of millions for repeat offenders.
The political backdrop is critical. With more than half of Australian businesses reporting tariff-related pressures from the US trade environment and households struggling with rising living costs, the government cannot afford to appear passive. Albanese’s approach echoes global trends, as governments in the UK and EU have similarly begun investigating supermarket chains for exploitative practices.
Comparative Overview of Supermarket Profits
Profit Levels of Major Supermarkets (Latest Available Reports)
| Supermarket | Financial Year | Reported Profit (AUD) | Notes on Market Share and Activity |
|---|---|---|---|
| Coles | 2024–25 | $1.08 billion | Significant player with wide national footprint |
| Woolworths | 2024–25 | $1.4 billion | Largest profit earner in the sector |
| ALDI | 2023 | $402 million | Smaller footprint but growing competitiveness |
This snapshot reveals the concentrated profitability of the supermarket sector. Even with a smaller presence, ALDI has carved out substantial earnings, suggesting room for stronger competition if barriers to expansion are lowered.
What It Means for Consumers and Businesses
The introduction of anti-gouging laws could trigger significant changes in how Australians shop. For consumers, the promise is simple: fairer prices, clearer labeling, and fewer hidden tricks. If successful, these measures may restore public trust in an industry often criticised for exploiting its market dominance.
For supermarkets, the implications are more complex. While compliance may impose additional costs, the reputational risks of failing to adapt could be far higher. Coles and Woolworths are already facing a joint class action over allegedly misleading discount claims, and these new laws could multiply their legal exposure if behaviour does not change.
The reforms will also affect suppliers. With supermarkets less able to rely on opaque pricing strategies, there may be more pressure to negotiate transparent contracts with producers. This could benefit smaller suppliers and farmers who often feel squeezed by the power of retail giants.
Trending FAQ
Q1: What is “shrinkflation” and why is it a concern?
Shrinkflation is when a product decreases in size or quantity but remains at the same price. It misleads consumers into thinking they are paying the same for the same value, when in fact they are getting less.
Q2: Who will enforce the new supermarket pricing laws?
The Australian Competition and Consumer Commission (ACCC) will oversee enforcement, supported by a new taskforce dedicated to policing excessive pricing.
Q3: Could these laws actually lower grocery bills?
While the legislation itself does not cap prices, it aims to prevent deceptive practices and force supermarkets to justify price rises. Over time, this transparency could slow the pace of price hikes and restore consumer trust.
Q4: Are Coles and Woolworths considered a duopoly?
The ACCC stops short of calling them a formal duopoly but acknowledges the market is highly concentrated with an oligopoly structure dominated by the two chains.
Q5: How do these reforms compare internationally?
Similar moves have been made in the UK and EU, where governments have pressured supermarkets to explain pricing structures amid inflationary spikes. Australia’s approach is notable for its emphasis on financial penalties and taskforce oversight.
The Albanese Government’s supermarket price gouging laws represent a decisive intervention in a sector central to daily life. For voters, the outcome will be measured not in parliamentary debates but in the price tags they see at the checkout. If implemented effectively, these reforms could mark a turning point in restoring fairness and transparency to Australia’s supermarket industry.
