Unit pricing code to be implemented by year’s end

Posted by Daniel Palmer on 24th March 2009

The Consumer Affairs Minister, Chris Bowen MP, yesterday released the draft industry code to implement a mandatory unit pricing scheme.

“This code – once enacted – will create a nationally‑consistent unit pricing scheme, so that all Australian consumers can have access to prominent, legible and unambiguous unit pricing information when they do their weekly grocery shop,” Mr Bowen said.

The code was based upon the framework previously announced in January, with stakeholder views to now be sought before the code is finalised.

The code will ensure a mandatory unit pricing scheme for major supermarket retailers, which was a recommendation of the ACCC following their inquiry into the competitiveness of retail grocery prices.

“The ACCC found that significant benefits would flow from the introduction of mandatory unit pricing, and today we are a step closer to securing those benefits for consumers,” Mr Bowen suggested.

The Government has announced its intention to establish the unit pricing code by 1 July 2009, in order for it to be introduced into supermarkets by 1 December 2009.

WHO THE UNIT PRICING CODE WILL APPLY TO:

• The draft code applies to online retailers, and store-based retailers with a floor space of more than 1000 square metres devoted to the display of grocery items, provided those retailers sell a minimum range of food-based grocery items.

The minimum range is at least seven of the following grocery categories:

* bread;
* breakfast cereal;
* butter;
* eggs;
* flour;
* fresh fruit and vegetables;
* fresh milk;
* meat;
* rice;
* sugar; and
* other packaged foods.

The code will apply to retailers who voluntarily display a unit price (with a transition period of six months), provided those retailers also supply the minimum range of food-based grocery items.

A store which voluntarily displays a unit price for some of its products, but does not supply the minimum range of food-based grocery items (for example, a department store unit pricing its chocolates, or a liquor store unit pricing its beer) would not be required to comply with the code.

VARIATIONS FROM THE STANDARD UNITS OF MEASUREMENT

Clause 11 of the draft code lists grocery categories for which a unit of measurement other than the usual ‘per 100g’, ‘per 100ml’, ‘per metre’, ‘per square metre’ or ‘per each’ will be required.

There are currently 14 items on this list, which has been compiled with the aim of minimising exceptions to the general rule, while providing consumers with the most relevant information for each grocery category. For example, products generally sold in small quantities, such as herbs and spices, would be unit priced by small quantities, such as 10 grams.

The list also takes account of trade measurement legislation which already requires unit pricing in certain units for certain goods. For example, meats, fruits, vegetables and cheeses should all be priced per kilogram.

PRODUCTS TO BE EXCLUDED FROM UNIT PRICING

Clause 10 of the draft code lists a number of grocery products which will not require a unit price. The list currently contains 19 items.

* Books, magazines and stationery
* Optical discs and magnetic storage devices used for computing, sound reproduction or video, whether or not they are pre-loaded with content
* Photography items and equipment
* Electrical items, except for batteries
* Garden tools, and items for garden or pool maintenance or decoration
* Flowers, including fresh, dried and imitation flowers
* Furniture
* Hardware items
* Manchester
* Computer equipment
* Audio-visual equipment
* Telecommunications items or equipment
* Items for motor vehicle maintenance or repair, other than consumable liquids
* Sports and camping equipment
* Toys
* Household appliances and kitchen and bathroom utensils
* Clothing, jewellery and other fashion items (other than cosmetics)
* Services, and goods supplied as part of providing a service, including mobile phone recharges
* Goods for hire

Minister Bowen has called for public comments on the draft code.The draft code is available on the Treasury website: www.treasury.gov.au, with comments sought by Monday 20 April 2009.

Submissions may be lodged with Treasury via:
Mail: The Manager, Consumer Policy Framework Unit, The Treasury, Langton Crescent, PARKES, ACT, 2600
Email: unitpricing@treasury.gov.au
Fax: 02 6263 3964
There will also be a formal conference to discuss with key industry and consumer groups their views on the details matters within the draft code.