Prime Minister Anthony Albanese has announced a proposal to ban price gouging in Australian supermarkets if the Labor government is re-elected in the upcoming federal election on May 3. Speaking on the ABC's Insiders program, Albanese declared that legislation aimed at making excessive pricing illegal would be introduced by the end of the year.

"We will ensure that supermarkets know they are being monitored and that the government is prepared to take strict action," he stated.

He characterized the current pricing behavior of some supermarkets as unfair to consumers.

Under the proposed measures, supermarkets found guilty of price gouging would face significant fines.

Albanese emphasized that Australians deserve equitable pricing at grocery stores and pledged to hold major supermarket chains accountable to the public.

Finance Minister Katy Gallagher supported this initiative during a press conference in Canberra, highlighting the government's focus on addressing the increasing cost of living.

She noted that the administration has been attentive to Australians' financial pressures, particularly concerning supermarket prices that have significantly impacted household budgets.

Regulations already exist in countries such as the United Kingdom, the European Union, and multiple US states to protect consumers from price gouging.

Labor's approach will first implement recommendations from the Australian Competition and Consumer Commission (ACCC) following a comprehensive supermarket inquiry.

This inquiry reported on the oligopolistic nature of the supermarket sector, with Woolworths and Coles dominating the market.

The task force proposed by the government would consist of officials from Treasury, the ACCC, and industry experts.

This group would be responsible for developing an excessive-pricing regime to be overseen by consumer watchdogs, with a report expected within six months.

While the ACCC's report suggested that the supermarket sector's pricing dynamics are complex, they did not reach a definitive conclusion on the existence of price gouging practices.

The ACCC recognized price increases in grocery items, particularly from late 2022 to early 2023, were rising faster than wage growth, yet it refrained from making any conclusive statements about price gouging, citing the intricacies involved in analyzing pricing across various products and fluctuating profit margins.

In response to Albanese's announcement, both Coles and Woolworths released statements denying allegations of price gouging, emphasizing that their profit margins align with those of their peers in the international market.

They argued that the ACCC's findings indicated that the primary factors driving grocery price inflation are external costs such as energy, labor, and production.

Opposition leader Peter Dutton criticized Albanese for what he described as weakness in confronting supermarket power.

He proposed more aggressive measures, including the potential for divestiture of supermarkets found to be exploiting their market share.

The Australian Greens have also taken a strong stance on this issue, proposing a 'prices commission' to monitor supermarkets and impose substantial fines for unreasonable price increases.

Their leader, Adam Bandt, suggested that the Green's earlier initiatives may have influenced Labor's policy direction on price gouging.

The ongoing debate surrounding the effectiveness of a price gouging ban remains contentious.

Experts have expressed skepticism regarding whether such legislation would lead to a tangible decrease in grocery prices, pointing out that previous inquiries have not consistently resulted in lower consumer costs.