By Joe Lederman and Alexandra Jannetto In the ‘Report of ACCC inquiry into the competitiveness of retail prices for standard groceries’, the main recommendation for addressing the perceived lack of competition between food retailers was to introduce a national unit pricing scheme for products in Australian supermarkets. The Federal government has now announced the way in which the scheme will be implemented. This article analyses the latest government announcement. Unit pricing is the display of the price of goods by unit of measure, for example per grams or per millilitres. It has already been voluntarily implemented in a number of Australian retailers and exists as a mandatory scheme in, for example, the European Union and several state jurisdictions in the United States. For a more detailed analysis as to the legal issues related to unit pricing, see our article “Where is 'unit pricing' heading?” in the September 2008 issue of FoodLegal Bulletin. On 8 January 2009, Minister for Competition Policy and Consumer Affairs, Chris Bowen, announced more details of the government’s proposed scheme for a nationally consistent mandatory unit pricing regime. “Unit pricing will help consumers save time and money,” Mr Bowen said. “Unit pricing will help consumers compare packaged grocery items of different sizes of different sizes easily and quickly.” Mr Bowen stated that “the Rudd government have designed an Australian unit pricing scheme that get the balance right – that empowers consumers and minimises the regulatory burden on businesses.” The final Bill has yet to be presented to Federal Parliament. The details of the proposed national unit pricing regime (‘the proposed regime’) are outlined below. Legal Mechanism The proposed regime will be established by regulation as a mandatory code of conduct under Part IVB of the Trade Practices Act 1974. Part IVB relates to industry codes, which can be mandatory or voluntary, and can be prescribed by the Australian government. An example of a mandatory code of conduct is the Franchising Code of Conduct, which aims to ensure that franchisees are well informed when starting their business and that disputes can be resolved quickly and inexpensively. The mandatory code of conduct for unit pricing will be established by 1 July 2009 with a transition period of 6 months for all retailers who will be affected by the legislative change which will apply from the 1 December 2009. Retailers Affected The proposed regime will apply to all store-based retailers who display groceries with a floor space greater than 1000m2 and that supply at least a prescribed range of food-based grocery items. It will also apply to all online retailers that supply at least a prescribed range of food-based grocery items. The proposed regime will also apply to any other retailer that chooses to display unit prices for grocery items with a transition period of six months. Retailers with stores no greater than 1000m2 are exempted. Requirements of the Proposed Regime The proposed regime will require all retailers affected by the legislation to provide a unit price for all items they sell for which a selling price is displayed, unless the item is part of a prescribed category of exempt items. It will require that the unit price be prominent, unambiguous, legible and in close proximity to the selling price. Representations The proposed regime will apply to all in-store representations of price unless specifically excluded, apply to all online store prices lists unless specifically excluded and apply to other non-store print advertising such as catalogues, newspaper advertisements or front-page website advertisements. What the Proposed Regime will not apply to The proposed regime will not apply to goods: · sold at a reduced price due to damage or their perishable nature; · offered for sale as a bundle of different types of items for a single price; · that are part of a prescribed category of exempt goods for which unit prices are not practical; or · non-print advertising such as radio and television. The prescribed range of food-based grocery items and the prescribed category of exempt items it yet to be determined. The government will undertake further consultation before finalising the regime under the Trade Practices Act. The Australian Competition and Consumer Commission (ACCC) will provide industry and consumers with educative measures and be the agency responsible for the enforcement of the code. Mr Bowen also advised that the government was progressing the ACCC’s other recommendations in the ACCC Report, and that further announcements with respect to those recommendations will be made by mid-2009. FoodLegal will keep readers informed of further developments on those recommendations, and on the unit pricing legislation.
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