Claims of savings from unit-based pricing are misleading: ARA

Posted by Daniel Palmer on 16th May 2008

The unit pricing plan, which has been gathering momentum throughout the year, was finally introduced to the Senate yesterday by the Family First Party.

The proposed changes, to the way grocery prices are shown, will require supermarkets to display a ‘price-per-unit measurement’ figure on their products. Similar unit pricing measures have been used in some areas in New Zealand, Europe and the US, with changes to legislation designed to help consumers cut their grocery costs.

Consumer group CHOICE has been advocates of the plan for about a year while Family First Senator Steve Fielding has also been vocal in his support of ‘unit pricing’.

“By comparing items sold on a per unit basis, such as per kilogram or per litre, shoppers can save thousands of dollars a year on their weekly supermarket shop,” Mr Fielding said. “Supermarkets should provide families with fair and transparent pricing so they can get the best value for their dollar.”

Peak retail industry body the Australian Retailers Association (ARA), meanwhile, believes the Family First Party, while acting with the right intentions, needs to analyse more deeply their suggestion to introduce unit-based pricing to groceries.

ARA Executive Director Richard Evans said the assumption that unit-based pricing would enable Australian families to cut their grocery bills is deceptive.

“For any regular grocery shopper, it is a ‘no-brainer’ that prices will vary the more you buy,” he said. “However, the assumptions of reducing the amount of money handed over at the supermarket checkout is misleading as the final payment may indeed go up if the unit price was cheaper on greater quantities. Shoppers may get a better unit price but their actual cost will go up as they buy more.”

Expect the topic to cause a heated debate in and out of parliament, with grocers around Australia monitoring the implications of any changes very closely.