Coles and Woolworths have voiced strong opposition to recently introduced Federal price-gouging laws aimed at large retailers. The legislation prohibits excessive pricing in relation to supply costs and reasonable profit margins. This regulatory change, part of Australia’s food and grocery code of conduct, will take effect from July 1, 2024, and is set to be enforced by the competition regulator.
Federal Treasurer Jim Chalmers explicitly named Coles and Woolworths as the primary companies affected by these new laws. Under the regulations, the supermarkets could face fines of up to $10 million for each violation, or up to three times the financial benefit derived from such breaches, or 10 percent of the company’s turnover during the previous 12 months.
In a statement released on Sunday, Coles argued that the price-gouging laws would create “upward, not downward” pressure on prices. The supermarket chain contended that multiple inquiries have shown that rising grocery prices are primarily driven by increased costs related to energy, fuel, insurance, production, freight, and distribution.
“To put it into perspective, for every $100 customers spend at Coles, we make around $2.43 in profit — less than 3 cents in the dollar,” a spokesperson for Coles stated. “Australia’s grocery sector is highly competitive, and excluding large multinationals from this legislation does not accurately reflect how Australians shop and risks weakening competition.”
Woolworths Responds to Regulatory Changes
A spokesperson for Woolworths described the new law as “unprecedented,” highlighting that it specifically targets only two major Australian-owned companies. They claimed this creates an “uneven playing field,” allowing larger foreign-owned retailers to set prices freely without the constraints of the new restrictions.
“We acknowledge the introduction of this regulation,” the spokesperson said. “However, we are currently focused on delivering the best value for our customers. Average prices in Woolworths food retail have declined year-on-year for seven consecutive quarters, ultimately benefiting our customers.”
Recent findings from the Australian Competition and Consumer Commission indicated that Coles and Woolworths rank among the most profitable supermarket chains worldwide. The report noted that their profit margins have increased over the past five financial years, despite finding little evidence of price gouging within the sector.
In the 2025 financial year, Coles reported a profit of $1.08 billion, while Woolworths achieved a profit of $1.4 billion. These figures underscore the dominance of these two retailers within Australia’s highly concentrated supermarket sector, which has been characterized as an oligopoly.
As the implementation date for the new laws approaches, both Coles and Woolworths are preparing to navigate a landscape that may significantly alter their pricing strategies and operational frameworks. The ongoing debate surrounding these regulations highlights the tension between government oversight and market dynamics within Australia’s grocery sector.
