The weekly shop has become a source of quiet dread for many Australians. Between the price of a loaf of bread and the cost of lettuce, the total seems to creep ever upwards, no matter what specials are plastered across aisle ends. It’s into this frustration that the Albanese government has thrown its latest political gambit—an election pledge to make supermarket price gouging illegal.
At first glance, it’s a straightforward promise. A future Labor government would write new rules empowering the consumer watchdog to investigate, deter, and penalise retailers for charging more than what’s deemed fair. Prime Minister Anthony Albanese, never one to hold back colloquially, says supermarkets have been “taking the piss,” exploiting their market dominance at the expense of household budgets. The pitch is simple: if you’re gouging Australians, you’ll face hefty fines. The finer print, however, is anything but.
Labor plans to set up a taskforce—including the ACCC, Treasury officials, and economists—to draft a workable definition of excessive pricing. By late 2025, this would become law. Until then, we’re left to debate whether supermarkets have indeed crossed the line from profit to profiteering—and whether a law can tell the difference.
Supermarkets deny wrongdoing. Coles and Woolworths point to global disruptions, higher wholesale costs, and expensive logistics. The pandemic, energy price shocks, labour shortages and war have all contributed to an inflationary mess, they argue, and grocery margins have remained within reason. Yet the ACCC’s 2024 report showed that margins had increased, and competition was found wanting. Not enough, regulators say, to declare gouging. But enough for government to conclude something’s off.
The proposal, then, is designed not to fix prices but to stop unjustified spikes. If the price of cucumbers suddenly jumps 70% and there’s no flood, no fuel hike, and no transport bottleneck to blame, the ACCC could step in. Warnings would be issued, supermarkets would be asked to explain, and if that fails, penalties would follow. Think of it less as a scalpel and more as a spotlight—a way to shine heat on dodgy pricing practices and pressure supermarkets into restraint.
Labor argues the mere existence of such a law will do most of the work. Knowing the ACCC is watching, Coles and Woolworths might think twice about inching prices upwards when costs haven’t changed. The strategy is deterrence via visibility. History shows this isn’t uncharted territory. The ACCC played a similar role during the GST rollout in 2000, warning businesses not to exploit the tax change to sneak in price increases. During the early days of the COVID-19 pandemic, it had powers to crack down on outrageous prices for masks and sanitiser.
This new plan would go further. It wouldn’t be limited to emergencies or pandemics. It would become a permanent part of Australia’s consumer protection architecture. That, economists say, is where things get complicated.
There’s broad agreement that supermarket competition is anaemic. The Coles-Woolworths duopoly controls roughly two-thirds of the market. Aldi’s rise has helped, but even then, many suburbs lack genuine choice. Regional towns and cities like Hobart feel this acutely. For these communities, a pricing watchdog could be a lifeline. But how to separate fair pricing from unfair?
Economists, including former ACCC chair Graeme Samuel, are sceptical. They argue the focus should be on inputs—fuel, freight, wholesale prices—not the end price tag. Trying to legislate fairness, they warn, risks confusion and could discourage investment or reduce availability. The same has been said overseas. In the US, dozens of states have price gouging laws, mostly invoked during hurricanes or emergencies. They’re rarely used beyond those moments, and many economists remain unconvinced they make markets fairer in the long run.
Europe provides another case study. Excessive pricing laws do exist under EU competition rules, but enforcement is rare and difficult. Cases that succeed typically involve niche scenarios—like drug companies hiking the price of off-patent medication by thousands of percent. Even then, proving that a price has “no reasonable relation” to cost is painstaking.
Argentina is often cited as what not to do. Years of price freezes and controls—intended to curb inflation—have backfired. Shelves sit empty, black markets thrive, and inflation rages on. There’s little appetite in Canberra for such brute-force controls. Labor’s plan is not to cap prices, but to ensure that gross overcharging carries a cost.
The question becomes: will it work? There’s no denying the politics are shrewd. Few things unite voters like irritation at the checkout. The Coalition has accused Labor of playing catch-up, pointing to years of inaction and multiple supermarket inquiries. But they’re hardly objecting. Opposition MPs say they too would be happy to outlaw price gouging—though some lean towards tougher ideas, such as breaking up supermarket chains if they abuse power. The Greens, never short of ambition, have long called for divestiture powers and claim Labor is piggybacking on their proposals. Yet on this, there’s agreement across the spectrum: supermarket power needs curbing.
Labor’s broader pitch is about fairness. This extends beyond customers to suppliers. The new Grocery Code of Conduct, mandatory from April 2025, includes penalties of up to $10 million for mistreating suppliers. Farmers have long complained of being squeezed at the farmgate while retail prices remain high. The National Farmers’ Federation likens the situation to the banking sector before the royal commission—a system ripe for scrutiny. By targeting both the top and bottom of the supply chain, Labor wants to portray itself as the party standing between ordinary Australians and corporate overreach.
Consumer advocates, meanwhile, focus on transparency. CHOICE has supported clearer labelling and efforts to fight “shrinkflation”—where package sizes shrink but prices don’t. They support anything that lets consumers compare prices more easily. Labor agrees. Among its pledges are requirements for supermarkets to publish prices online and disclose discounts more transparently. Some call this more powerful than a price-gouging law. If shoppers can see what each chain is charging, pressure mounts naturally.
Still, consumer confidence is fragile. The ACCC’s report avoided the word “gouging” but acknowledged that trust is eroding. That’s partly why Labor is pressing ahead. Whether or not it ends in court cases, the law sends a message. Supermarkets are on notice. Voters are being heard.
The danger, of course, is that nothing much changes. Retailers may shift tactics—reducing discounts, trimming package sizes, or hiding price rises in convoluted deals. The law will need to be sharp enough to catch such workarounds, but flexible enough to avoid paralysing the sector.
Labor is betting that it can thread the needle. With the election looming, the party wants to show it has solutions for the cost-of-living crunch, beyond sympathy. Tax cuts, power bill relief, cheaper medicine, and now, a supermarket crackdown. It’s all part of a pattern: a government positioning itself as the referee in markets it says have tilted too far towards profit.
If re-elected, the challenge will be turning a populist promise into workable policy. Voters don’t expect perfection, but they do want someone looking out for them. Whether it’s lettuce in Brisbane or bread in Ballarat, Australians want fairness—or at least, the sense that someone’s keeping watch.
Whether Labor’s price-gouging promise becomes a real safeguard or fades into another symbolic gesture will be up to voters to decide. The real verdict won’t come from economists or policy advisers, but from shoppers across the country—and they’ll deliver it on 3 May, perhaps with their receipts in hand.
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