On 1 July 2026 it became illegal for Coles and Woolworths to charge significantly excessive prices for groceries. The maximum penalty is the greater of $10 million, three times the benefit, or 10% of annual turnover.
So far, nothing at the shelf has visibly changed — and the law was never built to work that fast. It is a slow enforcement tool aimed at systemic overpricing, not a price cap, and it leaves the practical question untouched: whether the thing in your hand is cheaper somewhere else.
Here is what it covers, what it does not, and what it means for your shop.
What the law says
| Started | 1 July 2026 |
| Covers | "Very large retailers" — currently Coles and Woolworths only |
| Prohibits | Pricing that is "significantly excessive" against cost of supply plus a reasonable margin |
| Penalty | The greater of $10 million, three times the benefit, or 10% of annual turnover |
| Enforced by | The ACCC |
It sits inside the Food and Grocery Code rather than in a new act of its own, and the ACCC administers it alongside the consumer law it already enforces.
It covers two supermarkets, not the supermarket aisle
A "very large retailer" is one running a supermarket business in Australia whose total Australian revenue, counting related companies, exceeded $30 billion in the previous financial year. Only Coles and Woolworths currently clear that bar.
Aldi is not covered. Neither is IGA, nor Costco, nor your local grocer.
That is worth sitting with, because Aldi is the chain that keeps winning the basket surveys — its 16-item basket came to $68.60 against $77.53 at Woolworths and $78.58 at Coles in March 2026. The law targets the two chains with the largest revenue, which is a measure of size, not of whether their prices are the ones you should worry about.
The word doing the work is "significantly"
The prohibition does not bite whenever a price looks steep. It bites when pricing is significantly excessive compared with what it costs the supermarket to supply the product, plus a reasonable margin.
Those costs are drawn broadly — acquisition, preparation, transport, wages, rent, research and development, and capital spending on equipment and technology all count. And there is no fixed threshold for what an excessive price is. The ACCC weighs all the circumstances, case by case.
That design is deliberate, and it is also the hard part. As Associate Professor Meg Elkins of RMIT University put it, "supermarkets sell thousands of products with shared costs, so isolating one item's true margin is close to impossible". A pallet of milk and a pallet of shampoo move through the same truck, the same distribution centre and the same checkout staff. Deciding what share of that truck belongs to the milk is a modelling exercise, not a measurement.
Two UTS academics, Associate Professor Sanjoy Paul and Senior Lecturer George Tian, made the same point when the bill passed, and added the broader caution that "price regulation alone does not guarantee sustained lower prices". In the EU and UK, where regulators can act against excessive pricing by dominant firms, such cases remain rare.
The regulator's own inquiry did not find price gouging
This is the part that gets lost in the headlines.
The ACCC's year-long supermarkets inquiry reported in March 2025. It found the chains to be among the most profitable supermarket businesses among global peers, with average product margins rising over five financial years — but its 20 recommendations were about transparency: clearer promotion tickets, shrinkflation notifications, loyalty program disclosure, and publishing price data to comparison tools. Not price levels.
The excessive pricing prohibition did not come from those recommendations. It was a government election commitment made in March 2025, legislated in December that year.
That does not make it a bad law. It does mean it is a precautionary measure built on a finding of high profitability, rather than a remedy for a proven finding of gouging — which is a fair part of why expectations of an immediate price fall were always misplaced.
What has actually happened since 1 July
Monitoring has started. Enforcement has not visibly followed.
The ACCC said it would prioritise a select group of products, chosen from consumer and supplier reports and from pricing, margin and revenue data obtained from the supermarkets. Acting Chair Catriona Lowe said the ACCC would "focus our attention on products where excessive pricing is likely to cause the most harm to consumers", with the initial focus list to be published "in the coming months". We could not find that list published as at 16 August 2026, nor any enforcement action taken under the prohibition.
One practical point most coverage has skipped: the ACCC does not resolve individual complaints about excessive pricing. Reporting a product still helps, because reports feed the focus list — but nobody is going to adjudicate the price of your cereal. The prohibition is a systemic tool.
What this means for your shopping
Elkins draws the gap precisely: "The law's test is cost-based, asking whether the price is excessive relative to the cost of supply. But the public's test is memory-based, asking whether this price is higher than expected." Her view is that the law's biggest effect on the chains may be psychological — "making them feel watched, rather actually catching them out legally".
Neither test is one you can run standing in the aisle. You cannot see their supply costs, and neither, easily, can the regulator. Memory is no better an instrument: it is precisely what a "was" price on a discount ticket is designed to exploit, as the Coles "Down Down" judgment showed.
The question you can answer is the one that decides your bill: is this cheaper somewhere else this week? Those are genuinely different questions, and only the second is settled by evidence you have access to.
So the practical response to the new law is the same as it was before it: check per item, and compare unit prices rather than shelf prices so a 900g pack can be judged against a 1kg one. See what each chain is charging today — each card shows the retailers we hold a matched price for, showing the unit price alongside each one wherever we can verify it. The catalogues do not line up item for item, so some products carry all three prices and many carry two. Searching, comparing and unit pricing need no account.
There is a third question worth asking, and it is the fix for the memory-based test Elkins describes: what has this actually cost over time? A recorded price does not fade or flatter the way a recollection does. Seeing months of it tells you whether today's $6.50 is genuinely good for that product, and how often it goes on special — which is what decides whether to buy one now or two. A staple that discounts every six weeks is a different shopping decision from one that discounts twice a year, and the ticket looks identical either way.
Full price history charts are part of Grovena Pro, at $5.99 a month, along with weekly price-drop alert emails so a staple you rebuy tells you when it moves rather than you having to check. It is built around the twenty or so things you buy on repeat, where months of a price actually tell you something.
It is also worth knowing what else changed alongside the prohibition. The government is strengthening the Unit Pricing Code, including to tackle shrinkflation, and has given the ACCC over $30 million to address misleading conduct in the supermarket and retail sectors. Those measures are less dramatic than a gouging ban, and they may matter more to what you can see on a ticket.
Common questions
Is price gouging illegal in Australia now?
For groceries sold by Coles and Woolworths, yes, since 1 July 2026. The prohibition applies to retailers with more than $30 billion in Australian revenue, which currently means only those two. It does not apply to other retailers or to non-grocery sectors.
Does this mean grocery prices will fall?
There is no evidence of that so far, and the academics who reviewed the law when it passed cautioned that price regulation alone does not guarantee sustained lower prices. It is an enforcement tool against significantly excessive pricing, not a cap or a discount.
Why isn't Aldi covered?
The threshold is $30 billion in annual Australian revenue and Aldi does not meet it. The law targets the largest retailers by revenue, which is a measure of scale rather than of price.
Can I report a supermarket for overcharging?
You can report it to the ACCC, and reports help shape which products it examines. But the ACCC has said it does not resolve individual complaints about excessive pricing — it pursues systemic conduct.
How would anyone prove a price is excessive?
With difficulty, which is the main criticism of the law. Costs are shared across thousands of products, so attributing the true cost of any single item is a modelling exercise. There is no fixed threshold, so each assessment weighs all the circumstances.
The short version
Price gouging is now illegal for Coles and Woolworths, carrying real penalties, and it is genuinely hard to prove. Aldi is not covered. The ACCC is monitoring but has not yet named the products it is watching, and it will not arbitrate the price of any one item for you.
Nothing about the law changes what is worth doing in the aisle. Check today's grocery prices before you shop.