Woolworths and Coles face world-first laws targeting supermarket price gouging

Supermarket giants Woolworths and Coles will face new world-first laws as the Australian government cracks down on price gouging.

From July 1, 2026, Australia will become the first country to bring in such laws targeting supermarket price gouging even though its own report last year found there was no evidence of such a practice by the two supermarket giants.

The Australian Competition and Consumer Commission (ACCC) says it will use these new laws to keep Woolworths and Coles in check.

The crackdown will be aimed at Woolworths and Coles, as they are the only two supermarkets that qualify in Australia as a “very large retailer” making more than $30bn in revenue.

Aldi turnover in 2025 was $13.3bn and Metcash, which runs IGA, posted revenue of $10.5bn.

The new rules will fall under “excessive price prohibition”, but there is no fixed threshold for what is an excessive price for a grocery product.

The ACCC identifies price gouging as selling items for an amount that is “significantly excessive when compared to the cost to the very large retailer of the supply, plus a reasonable margin”.

But don’t expect grocery prices to fall due to the changing regulation.

The ACCC will monitor supermarket pricing information and consider all relevant circumstances to determine if a grocery product is excessively priced.

It will prioritise its monitoring on a select group of products chosen by consumers and supplier reports as well as information obtained from supermarkets on prices, margins and sales revenue.

ACCC acting chair Catriona Lowe said the new rules come in as grocery prices are a key concern for Aussie households.

“We will focus our attention on products where excessive pricing is likely to cause the most harm to consumers,” Ms Lowe said.

“We encourage consumers and suppliers to make a report to the ACCC if they have concerns that a supermarket may have excessively priced a grocery product. These reports will help us identify products that may warrant further investigation.”

Ms Lowe said it was just one of many tools the ACCC could use to promote competition in the supermarket sector.

“Our initial focus for the prohibition will be on monitoring Coles and Woolworths’ pricing information to ensure they comply with their obligations,” she said.

The ACCC said it would publish the products that it would examine more closely.

“We recognise that there is significant public interest in the ACCC’s ongoing work to ensure supermarkets act in accordance with the law,” Ms Lowe said.

Supermarket hits out a new laws

In a statement to NewsWire, Coles said for every $100 spent at the supermarket it made $2.43 in profit or less than 3 cents for every dollar spent.

Coles also pointed out multiple inquiries found no evidence of price gouging and said higher grocery prices were being driven by rising costs such as energy, fuel, insurance, production, freight and distribution.

“At Coles, we know that cost of living remains front of mind for Australians, particularly with the challenges of higher interest rates and the price at the bowser,” a Coles spokesperson said.

“We urge the government to tackle the real drivers of higher grocery prices for Australian families.”

“Increasing regulation is likely to put upward, not downward, pressure on prices. At a time when the focus should be on easing cost-of-living pressures, these regulations risk doing the opposite.”

Meanwhile, Woolworths says it remains focused on delivering low prices to Australians and points out how it now faces stronger laws than the rest of the world.

“We note that no other country globally has adopted this approach. The guidelines also do not clearly define what an excessive price is to enable practical and efficient business compliance,” a Woolworths spokesperson said.

“The regulations apply to two Australian-owned and operated supermarkets groups, while exempting global retailers, which have far greater scale globally, and have a significant and growing market share in Australia.