Australia's competition regulator today named the first eight grocery categories whose retail margins it will examine at Coles and Woolworths under the country's new supermarket excessive pricing law, a list that runs from potatoes and limes through bone-in chicken and unflavoured fresh milk to coffee and kitchen sponges, and that covers more than 1,000 items on the shelves of the two chains. The first public report under the legislation is due in early 2027. It will draw on data from before the prohibition took effect on July 1, 2026, which makes it a baseline rather than a verdict.

In Short

Australia's competition watchdog has picked eight everyday product groups, among them milk, bread rolls, chocolate and kitchen sponges, to check whether Coles and Woolworths are charging far more than it costs them to supply those products plus a reasonable margin. The checks cover more than 1,000 items and sit under a law that, since July 1, 2026, has barred the country's two biggest supermarkets from "significantly excessive" pricing, which brings supermarket margins, supplier cost increases and the way price rises are explained under formal scrutiny. Being on the list is not an accusation: the first report, due in early 2027, uses data from before the law started, and the regulator's separate guidance says high prices, surge pricing and shrinkflation are not illegal on their own.

Eight product groups, more than 1,000 items

The Australian Competition and Consumer Commission set out the list in release 126/26, dated November 13, 2026. "The ACCC is today announcing it will initially focus on the following product categories," according to the release:

  • potatoes
  • limes
  • chicken, bone-in
  • unflavoured fresh milk
  • bread rolls
  • chocolate (blocks and snack bars)
  • coffee
  • kitchen sponges and scourers.

Two of the eight are fresh produce. One is meat, one dairy, one bakery. Chocolate and coffee follow, and the eighth group is not food at all. According to the ACCC, the focus product groups "represent more than 1000 items available across Coles and Woolworths supermarkets." The release does not break that number down by category or by retailer, and it does not name a single brand, pack size or own-label line.

Deputy Chair Mick Keogh was careful about what inclusion means. "It's important to note that just because a product is on our focus list, it doesn't mean that we currently consider supermarkets are obtaining unreasonable margins on these products. It signals that we think the pricing of the product warrants closer examination," he said.

The ACCC's page on the prohibition describes these as the focus products for 2026-27. More will follow. "Additional focus products subject to closer examination will be announced next year," according to the release, which gives no month.

How the eight were chosen

The selection drew on four kinds of information, according to the ACCC: reports from consumers and suppliers; whether a product is considered essential or discretionary; the prices of the products during the 2024-25 and 2025-26 financial years; and margins and sales revenue.

Australia's financial year runs from July 1 to June 30. The two years the ACCC looked at therefore cover July 1, 2024 to June 30, 2026 - the 24 months that ended the day before the prohibition began. Every price and margin that shaped today's list was set before the law applied.

The release does not say how many products were considered, how the four criteria were weighted, or which of the eight the ACCC classed as essential and which as discretionary. Nor does it publish any of the price or margin data behind the choice.

Supplier reports are a notable input. In Australian grocery, suppliers range from multinational food manufacturers to individual growers, and the release lists their reports alongside those of consumers as a reason a product may draw attention. The ACCC said it would pick focus products this way on June 26, 2026, in release 64/26, when it confirmed it would begin monitoring supermarket pricing from July 1 and publish initial focus products in the following months. Today's list arrives 140 days after that announcement.

The list is also not the outer boundary of the work. "Our compliance monitoring is not limited to the announced focus products. We will continue to obtain and analyse margin and pricing information for all grocery products available at Coles and Woolworths, alongside reports from consumers and suppliers," Keogh said.

A baseline, not a verdict

The timetable matters more than the list. According to the release, the ACCC "will publish an initial monitoring report in early 2027, covering focus product prices, costs and margins. This report will draw on data from before the start of the prohibition and will provide a baseline for future compliance monitoring."

That design means the first report is not built to find a breach. Conduct before July 1, 2026 could not contravene a prohibition that did not yet exist. What the report can do is fix a reference point - a set of prices, costs and margins for the eight groups - against which later behaviour will be measured. Any public evidence on how Coles and Woolworths have priced since the law began will come in subsequent reports, on a timetable the release does not give.

Enforcement is not ruled out. "While the ACCC may take enforcement action if appropriate, the initial focus will be on monitoring of compliance with the new laws," according to the release.

The machinery behind that monitoring is set out in the ACCC's compliance and enforcement guidelines, published in June 2026. According to the guidelines, the regulator expects to issue each very large retailer with a compulsory information notice under section 51ADD of the Competition and Consumer Act twice a year to obtain pricing information, with 21 days to respond, and expects to use its broader section 155 investigative powers where it needs more detailed material. Under the prohibition, the retailers must keep pricing and cost records for at least three years.

Keogh framed the purpose in household terms. "This work matters to Australian consumers who are acutely aware of price increases in their supermarket shop," he said.

Who the law covers

The prohibition was announced by the Australian Government on December 14, 2025, and implemented as an amendment to the Food and Grocery Code of Conduct. It came into effect on July 1, 2026, 199 days later.

It applies only to "very large supermarket retailers that have an annual revenue of more than $30 billion for the 2025-26 financial year, which currently captures Coles and Woolworths," according to the release. The threshold is A$30 billion. No other Australian grocer is covered. Under the ACCC's guidance, a retailer that crosses or falls below the threshold must notify the regulator.

The ACCC is responsible for enforcing the Food and Grocery Code, including this prohibition. The stated purpose is "to promote workably competitive outcomes in grocery product markets and protect the welfare of consumers by prohibiting excessive pricing by very large supermarket retailers."

Penalties are substantial. The release says only that "significant penalties may apply for breaches of the Food and Grocery Code of Conduct." The guidelines are more specific: for a company, the maximum penalty for breaching the excessive pricing prohibition or its record-keeping rules is the greater of A$10 million, three times the value of the benefit obtained, or, where that benefit cannot be determined, 10% of adjusted turnover over the relevant 12 months. According to the ACCC's fines and penalties page, individuals are not liable to pecuniary penalties for excessive pricing, though they may receive an infringement notice.

The test: cost plus a reasonable margin

The legal test is short to state and hard to apply. The ACCC must "consider whether the price of a grocery product is significantly excessive when compared to the cost to the retailer to supply it, plus a reasonable margin," according to the release. "Under the prohibition, there is no fixed threshold for what is an excessive price for a grocery product, but the ACCC will consider all relevant circumstances."

The ACCC's guidance page on setting prices, which is undated and to which the release points readers, explains the arithmetic. "The total price of a grocery product is made up of direct and indirect costs to the supermarket in selling the product, and the supermarket's margin," it says. Those costs may include:

  • the cost of buying or producing the product
  • transport and fuel costs
  • storage costs
  • staff wages
  • store rent
  • research and development for new products
  • new equipment to produce new products.

The last two items are production costs rather than retailing costs, and they apply most obviously where a supermarket makes or commissions its own products. The page does not elaborate on how such costs would be spread across a range.

"The margin is the profit to the supermarket after subtracting all the costs from the retail price it receives for the product," according to the guidance. Its worked example uses a grocery product priced at A$8.00, with total costs to the supermarket of A$7.00 and a margin of A$1.00. By PPC Land's calculation, that margin is 12.5% of the shelf price, or a 14.3% mark-up on cost - two numbers that describe the same dollar and that are easily confused in public debate about supermarket profits.

The page closes the section with a caution: "Sometimes supermarket prices might seem high, but they may not be excessive once all the costs and circumstances are considered."

What the guidelines leave undefined

The June guidelines fill in some of the detail without supplying a number. According to the guidelines, the regulations define neither "reasonable margin" nor "significantly excessive." The ACCC says it will judge a reasonable margin with reference to factors such as market dynamics, the capital a retailer employs, commercial risks and margins on comparable kinds of products, and that the margin is meant to cover the cost of capital and reasonably necessary future investment. Margins seen in a workably competitive market are one benchmark.

The circumstances the ACCC lists as relevant include a product's shelf life, how often consumers buy it, whether it is essential or discretionary, what comparable retailers charge, geography, seasonality and the price elasticity of demand. Intent is not an element of the prohibition, according to the guidelines: a retailer does not need to mean to overcharge to be found to have done so.

Payments and rebates that suppliers make to a retailer are relevant to the margin assessment, the guidelines say. That is the point at which the law reaches into commercial arrangements between supermarkets and the brands they stock.

The guidelines also close off one possible side effect. According to the ACCC, the prohibition is not intended to be used by supermarkets as a reason to reject reasonable cost price increases from suppliers, and passing on a reasonable supplier increase will not, by itself, amount to excessive pricing.

The "Setting prices" guidance spends as much space on what is lawful as on what is not. Its opening points are blunt: "Businesses are generally able to set their own prices." "Supply and demand issues impact prices." "Prices that people think are too high, or a sudden increase in price are not necessarily illegal."

The page acknowledges the language consumers use. High prices are "sometimes referred to informally as 'price gouging' or 'excessive pricing'," it says. "Generally, high pricing, or passing on higher or increased costs, is not enough on its own to break the law. Costs may increase for genuine reasons like fuel cost increases. This is normal business practice."

Two case studies illustrate the point. The first goes back to 2011. "In 2011, Cyclone Yasi destroyed the bulk of North Queensland's banana crop when it passed through the area," the page recounts. Bananas remained available from growers elsewhere, but reduced national supply pushed prices up across the country as wholesalers and retailers paid more to secure stock and passed those higher costs on to customers.

The second involves a football stadium with an exclusive supply arrangement. Because spectators cannot bring their own food or drink, the venue does not consider prices elsewhere and "decides to set its prices higher than those charged for the same or similar items at nearby establishments." The ACCC presents both as examples of conduct that may look unfair but is not unlawful on its own.

Shrinkflation and skimpflation

The guidance also addresses two practices that have drawn consumer anger. When a product shrinks, or a producer switches to cheaper ingredients, while the price stays the same or rises, this is "sometimes referred to informally as 'shrinkflation' or 'skimpflation'. This on its own is not illegal."

There is a qualification that matters for brand owners and retailers alike. "However, a change in product size or ingredients that lower costs and leads to a higher profit for the supermarket might be relevant when considering whether it has engaged in excessive pricing," according to the ACCC. A pack-size decision, in other words, can enter the margin calculation if the saving accrues to the retailer.

Surge and dynamic pricing

The page treats surge pricing, raising prices at times of high demand, as lawful but conditional. Its example is a ride-share company lifting fares when riders outnumber drivers. "Surge or dynamic pricing is not illegal, but businesses must be clear about the price consumers will pay," according to the ACCC, and they must not make false or misleading claims about their prices.

Where the line sits

The guidance lists four areas where the ACCC can investigate and act on pricing: where businesses mislead consumers about pricing; where the reasons given for a price increase are misleading; where very large supermarket retailers engage in excessive pricing for grocery products; and against businesses involved in price fixing and other anti-competitive behaviour.

It is equally clear about its limits. "Outside of our role in regulated infrastructure, we don't set prices for goods or services," the page says. "We don't resolve individual complaints about pricing."

On anti-competitive conduct, three practices are singled out. Price fixing, when competitors agree on prices instead of competing, "is a form of cartel conduct and is always illegal." Suppliers must not try to stop resellers selling below a minimum price, and resellers must not ask suppliers to stop rivals from discounting. Selling below cost is a different matter: "It's usually legal for businesses to sell products below the cost price. However, if this is done in a way that substantially lessens competition, this is considered misuse of market power and is illegal."

Why this matters for marketers

Most of the ACCC's recent pricing work that touched the advertising industry has concerned how prices are presented, not how high they are. Its 2025 Black Friday sweep targeted countdown timers, storewide claims and was/now comparisons. Emma Sleep was ordered to pay A$15 million over fake countdown timers and phantom discounts, and digiDirect paid A$99,000 over misleading strikethrough discounts. When the ACCC set its 2026-27 enforcement priorities in February, the supermarket item on the list was misleading pricing claims. In October, its emissions claims guide applied the same scrutiny of headline claims to environmental marketing.

The excessive pricing prohibition is different in kind. It does not ask whether a shelf ticket or a promotional email tells the truth. It asks whether the number on the ticket is too far above cost. For the two retailers it covers, the price itself is now within regulatory reach.

Several consequences follow for people who sell, advertise and price grocery products in Australia.

Price rise messaging. The guidance lists misleading reasons for a price increase as a matter the ACCC can act on, separately from excessive pricing. "It's also illegal for businesses to make false or misleading claims about prices, including the reason for any changes in prices," according to the ACCC. Copy that attributes a price rise to higher costs is a factual claim, and that rule applies to every business, not only to Coles and Woolworths.

Supplier funding. Because supplier payments and rebates enter the margin assessment, the money brands spend with a retailer is relevant to whether that retailer's margin is reasonable. Trade promotion funding is the obvious category. Neither the release nor the pricing guidance says whether fees brands pay to a retail media network, such as Coles 360 at Coles or Cartology at Woolworths, count as supplier payments for this purpose. Australia's retail media market was valued at just over A$2 billion at the end of the 2025 financial year, with a projection to double by 2030, according to a session at the IAB Australia summit in July 2026. How the ACCC treats that income stream, if at all, is an open question that the first report may or may not address.

Pack sizes and formulations. The shrinkflation passage puts brand decisions about pack size and ingredients inside the excessive pricing analysis whenever the resulting saving lifts supermarket profit.

Supplier cost increases. The guidelines' statement that the prohibition should not be used to reject reasonable cost price increases speaks directly to annual price negotiations between brands and the two chains.

Category exposure. Brands in coffee, chocolate, fresh milk, bread rolls, bone-in chicken, potatoes, limes and cleaning products now trade in categories that the regulator has publicly identified for closer examination, at least at the retail margin level.

The prohibition can be read as a statutory test of pricing power: the ability to raise prices, or keep them steady while costs fall, without losing enough customers to make it unprofitable. Australia is not alone in looking harder at how prices are set. In the United States, the Federal Trade Commission in August 2026 proposed a policy statement on undisclosed personalized pricing, one of whose illustrative scenarios involves a grocery chain charging more for milk based on household data, and on November 12, 2026 it and 17 states filed a proposed US$63 million order against Family Dollar over register prices that exceeded shelf tags. In the United Kingdom, the Competition and Markets Authority opened investigations into eight firms over online pricing practices including drip pricing in November 2025. Germany's Bundeskartellamt came at the question from the opposite side in February 2026, prohibiting Amazon's mechanisms for controlling third-party seller prices, including one that removed offers Amazon judged excessively high from the Buy Box. There, the objection was to a platform deciding what counted as too high a price. Who decides that a price is too high, and on what evidence, is becoming a regulatory question in several jurisdictions at once.

What the release leaves open

Several things are absent from today's announcement.

The ACCC has not published any margin figure, for any product, for either retailer. It has not said whether results will be reported separately for Coles and Woolworths or combined. It has not named the brands or own-label products among the more than 1,000 items. It has not said how many products were assessed before the eight groups were chosen, or how essential and discretionary products were weighed against each other.

The timetable is loose. "Early 2027" is the only date given for the first report, and "next year" the only date for the second tranche of focus products. Because the first report uses pre-prohibition data, the earliest public evidence of how either chain has priced under the new law will come later still.

And the central terms remain open by design. With no fixed threshold, no statutory definition of "reasonable margin" and no definition of "significantly excessive," the meaning of the prohibition will be settled through monitoring reports and, if it comes to that, through the courts. The eight product groups named today are where that process starts.

Timeline

Summary

Who: The Australian Competition and Consumer Commission, through Deputy Chair Mick Keogh, and the two supermarket chains currently covered by the excessive pricing prohibition, Coles and Woolworths. Suppliers and consumers whose reports informed the selection, and brands selling in the eight categories, are also affected.

What: The ACCC named eight product groups for closer examination of retail margins: potatoes; limes; bone-in chicken; unflavoured fresh milk; bread rolls; chocolate blocks and snack bars; coffee; and kitchen sponges and scourers, covering more than 1,000 items. Inclusion is not a finding of unreasonable margins. The ACCC's separate "Setting prices" guidance explains that the test compares price with cost plus a reasonable margin, and that high prices, surge pricing, shrinkflation and skimpflation are not illegal on their own, while misleading price claims, misleading reasons for price rises, price fixing, minimum resale price conduct and anti-competitive below-cost pricing are.

When: Announced today, November 13, 2026 (release 126/26). The prohibition took effect on July 1, 2026, after a government announcement on December 14, 2025. An initial monitoring report using pre-prohibition data is due in early 2027, and more focus products will be named in 2027.

Where: Australia, at Coles and Woolworths supermarkets, the only grocery retailers with annual revenue above the A$30 billion threshold.

Why: The prohibition aims to promote workably competitive outcomes in grocery markets and protect consumer welfare by barring significantly excessive pricing by very large supermarket retailers. The ACCC chose the products using consumer and supplier reports, essential or discretionary status, prices across the 2024-25 and 2025-26 financial years, and margins and sales revenue. For marketers, the law moves regulatory scrutiny from how grocery prices are presented to how high they are, with supplier payments, rebates and pack-size changes all relevant to the margin assessment.