FoodLegal

By Blake Weinberger (FoodLegal Lawyer)

© Lawmedia Pty Ltd, May 2026

The Australian Federal Government has doubled the maximum penalty for breaching provisions of the Australian Consumer Law (ACL), in a bid to significantly deter businesses from contravening conduct. This article examines how penalties for breach work, and what increased maximum penalties could mean for your business.

FoodLegal is running our Food Marketing Claims workshop on Thursday 28 May 2026, where we will cover ACL marketing compliance in much more detail. This article provides some background to understand potential areas of exposure. Get your tickets here.

How is the ACL enforced?

In Australia, the Competition and Consumer Act 2010 (Cth) contains laws to protect consumer rights and reduce anticompetitive behaviour. Schedule 2 of this Act consists of the Australian Consumer Law (ACL) – a comprehensive set of laws designed to protect consumers and promote fair trading. Because the ACL operates independently of other legal frameworks such as the Australia New Zealand Food Standards Code, FMCG businesses must ensure they comply with the ACL in addition to any laws regarding their specific product.

The ACL requires that businesses do not:

-        Engage in misleading or deceptive conduct (“MLD”) or make misleading or deceptive representations (including on product packages and online material);

-        Breach statutory consumer guarantees, or mislead consumers as to their entitlements under those guarantees;

-        Breach product safety standards, information standards (e.g. the Country of Origin Food Labelling Information Standard 2016) or labelling standards; or

-        Engage in unconscionable, anticompetitive or cartel conduct.

Whilst some breaches of the ACL may be scrutinised or enforced by private entities (including competitors), the primary enforcement body for the ACL in Australia is the Australian Competition and Consumer Commission (ACCC). The ACCC is a well-funded regulator with a strong history of taking public enforcement action against individuals and businesses for alleged breaches. The ACCC is empowered with a wide range of enforcement methods – they can issue infringement notices, fines and initiate court proceedings. The ACCC also regularly publishes press releases and notices regarding new and ongoing enforcement actions, which can result in brand reputational damage even if a breach is not proven.

Increased maximum penalties – what this means for businesses

Of the above potential enforcement action outcomes, the most serious and consequential is that fines can be issued by an Australian court if a breach is found. Prior to April 2026, the maximum penalty for breaching many ACL offences (including for MLD) was the greater of $50 million, 3 times the value of any benefit obtained, or 30% of a businesses turnover during the offending period.

However, on 28 March 2026, the maximum penalty was increased under the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Act 2026. Under the new law, the maximum penalties have been doubled, and are now the greater of:

-        $100 million per breach;

-        3 times the value of the benefit obtained; or

-        30% of an organisations annual turnover during the breach.

Where does the money go?

Because ACCC court proceedings for ACL breaches are initiated “on behalf of the Commonwealth” (per Section 77 of the CCA), proceeds from any ACCC-initiated court proceeding go towards the Australian Federal Consolidated Revenue Fund (the primary account for the Federal Government) and are not distributed to consumers affected by any MLD (or even the ACCC itself). However, if a Court finds that a business has breached the ACL, the ACCC may apply for compensation to be paid to non-parties (e.g. affected consumers) as an additional penalty option under Section 239 of the ACL. 

There are therefore only a few ways in which affected consumers (including competitors) themselves can receive monetary compensation where they have suffered a breach of the ACL:

-        A business contravening the ACL enters into an undertaking with the ACCC that they will distribute monetary compensation to affected consumers;

-        A private entity (e.g. competitor business) initiates and succeeds in obtaining compensation in court proceedings under the ACL, rather than the ACCC; or

-        A class action is initiated and is successful under other legislation.

Minimising ACL risk

Whilst Australian Courts have consistently said that the maximum penalty should only be applied for the most severe and intentional breaches, the new maximum penalty gives courts a significant amount of room to impose higher penalties. In the time since penalties were increased to $50m (from the previous $1.1m) in 2018, Courts had already become comfortable imposing higher and higher penalties for especially problematic conduct.

This means that businesses should take great care in ensuring advertisements and product packaging fully comply with the ACL, and specifically that they do not engage in MLD. There are some types of claims and advertisements that can present risk of being misleading or deceptive, especially considering the ACCC’s Compliance and Enforcement Priorities for 2026-27. Potential risk could arise in relation to:

-        Social media posts and testimonials;

-        Product imagery and emphasis of particular ingredients;

-        “Pure”, “natural” and “fresh” claims;

-        Place of origin and Country of Origin claims; and

-        Environmental claims (including “sustainability” and “biodegradability” claims) – these are an ongoing enforcement priority for the ACCC and could present significant risk if not managed carefully.

All of these topics are covered in FoodLegal’s Food Marketing Claims online workshop, being held online on 28 May 2026. The workshop is specifically designed to assist anyone working in a regulatory, legal, quality assurance or marketing position with making claims on food products and reducing risk as much as possible. The workshop will also include practical case examples and enforcement actions to demonstrate where risk may lie and how it can be mitigated.

FoodLegal can also provide specific advice regarding ACL compliance and enforcement in relation to your business and products.

This is general information rather than legal advice and is current as of 13 May 2026. Contact FoodLegal for tailored advice on your specific circumstances.