Supermarkets could face tougher rules as Labor frontbencher says some prices ‘don’t pass the pub test’

Supermarkets could face tougher rules on how they set prices or stiffer penalties from consumer complaints, with the Albanese government arguing big retailers should be passing on savings in grocery bills in a cost of living crisis. As one frontbencher declares some prices “don’t pass the pub test”, the government will announce on Wednesday that the former Labor trade and consumer affairs minister Craig Emerson has been appointed to lead a review of the Food and Grocery Code of Conduct.

The code governs how Aldi, Coles, Woolworths and Metcash, which operates IGA, deal with suppliers and customers. A statement from the prime minister, Anthony Albanese, to announce Emerson’s appointment said the government would “look at every option to make sure Australian customers get the best possible deal”.

Queensland farmers call for probe into price gouging after premier writes to grocery giants Read more Albanese said retailers had a duty to provide affordable options for shoppers, especially as supply costs drop as inflation eases, flagging the possibility of more government mandated rules in the supermarket sector.

“This may involve shifting from industry led codes of conduct and consumer functions to Government mandating requirements and consumer complaints handling,” Albanese’s statement read. “As inflation continues to moderate and as businesses see some of their costs reduce, we expect to see these benefits flow directly to consumers and households.” Other options under consideration include boosting consumer rights.

The code, which is voluntary, could be made binding on supermarkets, with changes including stricter penalties for poor conduct or forcing retailers to publish information on their pricing. Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup Farmers and shoppers have raised concerns for some time about declining wholesale prices for fresh produce not leading to similar drops in prices on supermarket shelves.

The Queensland premier, Steven Miles, wrote to supermarkets last week over his “growing concern” about the disparity between checkout prices and the value farmers receive for their stock, while the Senate in December launched an inquiry into supermarket pricing . The federal government had already in September announced a review of the grocery code, but a person to lead the review had not been confirmed until now.

The National Farmers Federation, in welcoming the review last year, raised concerns about how suppliers were being treated by supermarkets, suggesting the voluntary code be made mandatory and calling for “significant civil pecuniary penalties” to be introduced. The agriculture minister, Murray Watt, said in November that the grocery code review could see penalties on retailers increased.

The shadow agriculture minister, David Littleproud, had in recent days strongly criticised the government for not announcing the person to lead the grocery code review, nearly 100 days after it was announced. He alleged Labor had “been shamed into announcing the reviewer” by his public pressure, but government sources claimed the announcement had always been planned for this week.

Albanese’s statement said the review was aimed at “making sure Australians are paying a fair price at the checkout and Australian suppliers are getting a fair price for their goods”. “We have been clear – if the price for meat and fruit and vegetables is going down at the farm gate then families should be seeing cheaper prices on supermarket shelves too,” he said.

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For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The treasurer, Jim Chalmers, said dropping grocery prices was “a big chance for the big supermarkets to do the right thing”.

Watt said “some of the prices supermarkets are charging just don’t pass the pub test”. The competition minister, Andrew Leigh, said a review of the code would create more choice. “Monopolies gouge consumers and workers, and undermine fairness. Competition means better prices and more choice for Australian families.” But Littleproud raised concerns about whether the code review would be completed by its 30 June deadline.

“The cost of living crisis, which involves grocery prices, is the most important issue facing Australian families. Sadly, this delay has been embarrassing for the Prime Minister, the Treasurer and the Agriculture Minister,” he said. The Nationals leader called for a supermarket review by the Australian Competition and Consumer Commission, saying industry surveys by agriculture groups had found many farmers were considering leaving their farms due to rising costs.

“Our growers and farmers need the confidence to get their fair share, to know they can negotiate in good faith and get paid on the right terms.”.