Retailers concerned about costs of unit pricing as Committee recommends changes to proposed legislation

Posted by Daniel Palmer on 12th September 2008

The Australian National Retailers Association today restated its support for a cost-effective, national unit pricing system, following the release of the Federal Government’s
discussion paper.

ANRA CEO Margy Osmond said that a framework was needed to ensure retailers are not subjected to “inflexible and costly regulations”.

“Unit pricing should give shoppers clear, handy information that doesn’t add an unnecessary burden on shop owners, potentially leading to higher grocery bills,” Mrs Osmond added. “A Code of Conduct could minimise retailers’ costs, and therefore minimize any impact on grocery bills, by giving retailers the flexibility to use their existing labelling systems, while still giving shoppers what they need.”

“ANRA is pleased that the Federal Government is open to such an approach.”

Mrs Osmond again urged the Queensland Government to halt plans to introduce its own regulations. “The retail community will be awash in red tape if each State government imposes its own costly and probably different schemes. A national approach is essential.”

Mrs Osmond reported that ANRA members were developing and introducing unit pricing regimes to assist their shoppers. “Franklins will begin to roll out unit pricing this month. Woolworths, is trialling unit pricing in NSW and intends to introduce it across all its stores. Coles is committed to introducing the scheme.”

The Australian Retailers Association (ARA) last week called on the Government to reject plans for national unit pricing scheme in the belief that consumers will not benefit and retailers could have up to $30 million in compliance costs. “Anyone who thinks unit pricing will reduce grocery prices needs to spend more time analysing the situation,” ARA Executive Director Richard Evans said. “The Committee’s report clearly indicates restrictions and additional compliance requirements on the retail market (including in-store redesign and technology upgrades) will increase costs for retailers by up to $30 million, which would ultimately be passed onto consumers.”

The Senate Committee’s report into unit pricing, to which Mr Evans referred, concluded that they supported the “policy intent” of the Bill but recommended the Bill not be passed due to concerns that it doesn’t strike “the right balance”. In particular they were worried about the “exemption criteria for grocery stores required to implement mandatory unit pricing; the definition of grocery retailers and grocery products; the definition of units of measure for unit pricing; and the definition of the required font size for unit pricing”.

Their recommendations suggested that a national unit pricing scheme be introduced after a detailed cost benefit analysis has been carried out, with the legislation to be phased in over the course of twelve months.

Family First Senator Steve Fielding, who introduced the Bill, was last week keen to continue the push for unit pricing and believes the key element to the success of the scheme would be the font size. “The absolute size of the font for the unit price and the font size relative to the size of the overall price of the product are crucial to ensure consumer awareness and use of unit price information,” Senator Fielding said prior to the release of the report. “Family First’s bill specifies that the size of the text giving the unit price information should be either 10 millimetres or 50% the size of the font of the text giving the selling price, whichever is greater.”

The Committee’s report can be found at: www.aph.gov.au/Senate/committee/economics_ctte/unit_pricing_08/report/index.htm.