Highly concentrated markets can be less competitive, leading to higher prices for consumers and increased pressure on suppliers. Australia’s two largest supermarket chains, Coles and Woolworths, account for around two-thirds of supermarket sales. This, combined with recent food price increases, has created renewed interest in how supermarket prices and supplier relationships are regulated.

Before the 2025 election, the Labor Government committed to ‘crack down on [supermarket] price gouging’ and establish an advisory taskforce regarding excessive pricing.

This paper outlines the context, what is ‘excessive pricing’ or ‘price gouging’, constitutional issues, current regulatory mechanisms, consideration of draft legislation, planning and zoning, and further options for addressing supermarket conduct.

Key points

• The Commonwealth has regulatory powers over most supermarkets through the Constitution.
• However, Australian law does not currently define the concepts of ‘excessive pricing’ or ‘price gouging’ and these can be very difficult to define (and prove).
• The Commonwealth’s existing legislative tools to regulate supermarkets include the (recently strengthened) Food and Grocery Code of Conduct.
• The Australian Competition and Consumer Commission’s (ACCC) Supermarkets inquiry: final report made several recommendations, including reforming land use planning and zoning to boost competition.