The Queensland Consumers Association’s submission (#56) to a House of Representatives Inquiry says changes are needed to the grocery unit pricing (pricing per unit of measure) system to make it much easier for consumers to compare grocery prices and values.
The submission, to the House of Representatives Standing Committee on Economics’ Inquiry into promoting economic dynamism, competition and business formation, says high levels of retail price transparency and comparability:
- Have the beneficial impacts on competition.
- Are needed in the highly concentrated retail grocery market.
- Can be achieved in the grocery market by providing shoppers with more effective unit pricing for packaged grocery products.
However, the submission says consumer usage of unit pricing for groceries is currently sub optimal for a variety of reasons including retailer noncompliance with a mandatory Code, and some store and online grocery retailers not being required by the Code to provide unit pricing.
This reduces the extent to which consumer use of unit pricing is able to increase competition in the grocery market.
There are many reasons for this including:
- Many grocery unit prices are not easy enough even for consumers with normal vision and mobility to notice, read, understand and use both instore and online due mainly to small, non-bold print, inconsistent units of measure, and non-provision.
- Insufficient proactive monitoring and enforcement of retailer compliance with the Code.
- The need for changes to unit pricing and measurement legislation.
Also, consumer usage of unit pricing is extremely low when buying packaged products from non-grocery retailers, such as pet supplies stores, chemists, hardware stores, and stationers, because these retailers are not required to provide unit prices and they rarely do so voluntarily. Consequently, since consumers spend large amounts with these retailers, the consumer detriment due to non-provision of effective unit pricing is very high and competition is reduced.
Therefore, the submission asks the Inquiry to recommend that:
1. The Australian Competition and Consumer Commission adopt a more proactive approach to monitoring and enforcing retailer compliance with the Retail Grocery Industry (Unit Pricing) Code of Conduct.
2. The Commonwealth government commission an independent, national review of the unit pricing system in order to:
- Assess the effectiveness of the current unit pricing and other relevant legislation (including measurement legislation) and its administration.
- Identify opportunities to increase the effectiveness and the scope of the current legislation and its administration.
3. More resources be provided to inform consumers about unit pricing and its uses.
The submission also strongly supports the Consumers Federation of Australia’s submission to the inquiry which includes support for demand-side initiatives to promote competition and recommendations on unit pricing.