Carbon Price threats pressuring producers and retailers

Posted by AFN Staff Writers on 5th July 2012

Food producers and food retailers are expecting heftier business costs arising from the Federal government’s recently implemented Carbon Price scheme, but the Australian Competition and Consumer Commission (ACCC) is investigating whether product price rises are justifiable.

The ACCC has recently been urged by food suppliers to examine new price rises for refrigerants. Australia’s major refrigerant importer, A-Gas, has reportedly said its increase in charges is attributable to the Carbon Price.

The ACCC has stated that all businesses are free to set their prices, but that price-rises attributed to the Carbon Price must be honest. In particular, the ACCC has been investigating whether or not the food retailer, Brumby’s Bakery franchise group, has been subjecting its franchises to lift their prices to preempt the pressure of the Carbon Price levy.

The Brumby’s Bakery franchise in the June 2012 issue of its newsletter ‘Backmix’ has acknowledged that it might not have been proper to attribute rising prices to the carbon tax.

The newsletter said, “We are doing an RRP (recommended retail price) review at present which is projected to be in line with CPI, but take an opportunity to make some moves in June and July, let the Carbon tax [sic] take the blame, after all your costs will be going up due to it.

If the ACCC were to find that Brumby’s Bakery had acted dishonestly, the potential fines could amount to up to $1.1 million. Australian Food News will monitor the outcome.