Retail component pricing looking likely

Assistant Treasurer and Consumer Affairs Minister Chris Bowen has declared his intention to regulate for pricing by weight – known as component or unit pricing – in a speech to the National Consumer Congress in Perth yesterday.

“Here is a case where we need to regulate – and we will regulate,” he said.

The Minister’s position will not be welcomed by small retailers, who fear that additional regulation will spell extra costs for them.

Bowen acknowledged the extra red tape for business, saying: “However, I’m very strongly of the view that regulation needs to be carefully crafted to ensure that those businesses – where everybody accepts they are doing the right thing – and those sectors that are not well suited to this type of regulation are not unduly burdened with this type of regulatory load.

“I’ll be making more statements about the way forward on component pricing in the not-too-distant future.”

The Australian Competition and Consumer Commission is currently reviewing grocery prices and looking at proposals to introduce component pricing. It is due to report to Government by 31 July 2008.

SmartCompany wrote in last year that retail chain Aldi is already trialling unit pricing in its stores, and a soon-to-be-released study on unit pricing has reportedly found that households spend an average $70 less per year when they are able to compare prices by weight.