24 Jul 2012
ACCC Closely Monitoring Carbon Price Related Price Increases
In less than two weeks after the introduction of the carbon tax on 1 July 2012, the Australian Competition and Consumer Commission (“ACCC”) received over 630 complaints and enquiries relating to increased prices and the carbon pricing mechanism.
Retail Food Group, the parent company of Brumby's bakeries, has recently escaped severe penalties after the Managing Director made questionable statements to franchisees in the company newsletter, encouraging franchisees to increase prices and to 'let the carbon tax take the blame'. Retail Food Group has instead been forced to issue a public apology and to enter into court enforceable undertakings that Retail Food Group and its many subsidiaries will not engage in any similar behaviour in the future.
The example involving Brumby's bakeries serves as a warning to all businesses. The ACCC will be closely monitoring price increases and ensuring that businesses are not engaging in misleading and deceptive conduct by falsely identifying the carbon price as the cause of any inflated prices.
The ACCC has assured businesses that they remain free to make their own pricing decisions. Generally, there is no requirement for businesses to justify any price increases, however any explanation that is provided must be accurate and have a reasonable basis.
Businesses should be cautious when making any claim that a price increase is related to the carbon price. Particular care should be taken to avoid suggesting that the whole of a price increase is due to the carbon price, when only a proportion of the increase is related.
Quick tips for businesses:
- You are required to independently determine your own carbon costs.
- Be careful when relying on information from suppliers.
- Avoid discussions and agreements with competitors as to carbon price related price increases.
- Ensure employees and agents are briefed on how to respond to customer enquiries on price increases.
M+K can help you understand the carbon price.
Please call Roland Burt on 03 8615 9966 should you require any further information regarding the carbon pricing.
This article was written by Natalie Lasek, M+K Commercial Team.
Contact M+K in your state:
Victoria - (03) 9794 2600
New South Wales - (02) 8298 9533
Queensland - (07) 3235 0400
Tasmania - (03) 6210 0000