With grocery prices still straining household budgets in Australia, the federal government has moved to crack down on price gouging by major supermarkets. New laws targeting retail giants like Coles and Woolworths aim to curb excessive pricing, reshape competition, and deliver fairer outcomes for shoppers at the checkout.

Here's how the new price gouging ban will impact shoppers and retailers alike.

What is a price gouging ban?

Put simply, the new price gouging regulations announced by the government will make it illegal for very large retailers like Woolworths and Coles to be able to charge excessive prices for goods when compared to the cost of the supply plus a reasonable margin.

The new laws have been implemented off the back of the ACCC’s supermarket inquiry earlier this year, which found that Coles and Woolworths dominate Australia’s grocery market in a way that dulls genuine price competition. While the regulator could not conclusively prove illegal price gouging during the pandemic and cost-of-living crisis, it did find that both supermarkets maintained or increased their profit margins as prices rose, making them among the most profitable globally. In essence, the inquiry suggests that high grocery prices are not just the result of higher costs, but also of a market where limited competition allows the major players to protect their profits, leaving shoppers with few real alternatives at the checkout.

The intention of the ban is to hopefully lower grocery bills for all Australians, resulting in a fairer trip to the grocery store.

How will this be enforced?

The Australian Competition and Consumer Commission (ACCC) will be responsible for enforcing the new regime, which includes issuing fines and penalties to retailers. If Coles or Woolworths break the new price-gouging laws, they could be fined at least $10 million, and possibly much more.

The fine will be whichever is highest out of:

• $10 million
• three times the profit they made from breaking the law, or
• if that profit can’t be worked out, 10 per cent of the company’s total sales over the past year.

But how will the ACCC actually monitor this in practice?

1. Ongoing price surveillance

The ACCC regularly collects data on prices, costs, and profit margins from major retailers (like Coles and Woolworths). They compare price rises with changes in costs (such as wages, fuel, rent, and supply costs).

2. Mandatory information requests

The ACCC can legally force companies to hand over internal documents, pricing models, emails, and profit data. This helps determine whether price increases are justified or excessive.

3. Consumer and supplier complaints

Shoppers, farmers, suppliers, and whistleblowers can report suspicious price increases. A large number of similar complaints can trigger a formal investigation.

4. Market studies and inquiries

The ACCC runs deep investigations into entire sectors (like groceries). These studies look at patterns over time, not just one product or one week.

5. Comparing profits, not just prices

Price gouging isn’t just “prices going up.” The ACCC looks at whether companies are making unusually high profits that can’t be explained by higher costs.

When will it come into effect?

The new regulations will officially come into effect on 1 July 2026, and will become law within the Food and Grocery Code.

Why are supermarkets like Woolworths and Coles opposing it?

Coles and Woolworths say the ban could do more harm than good because it makes pricing decisions riskier and less predictable. The supermarket giants have argued that the law’s idea of what counts as “excessive” pricing is open to interpretation, even when price rises are driven by real costs like energy, freight and wages.

Faced with the threat of heavy fines, the supermarkets warn they may be forced to price more cautiously, scale back discounts, or pass on compliance costs – outcomes they say could quietly push prices higher. Both Woolworths and Coles also both claimed in public statements that the laws unfairly single them out, potentially distorting competition rather than delivering the cheaper groceries shoppers are hoping for.

Image: IMDb