ACCC takes ear­ly action on car­bon price claims — make sure you don’t make your­self a target

The car­bon price com­menced in Aus­tralia on 1 July 2012. As part of the new régime, the gov­ern­ment has direct­ed the ACCC to under­take a com­pli­ance and enforce­ment role in rela­tion to claims made about the impact of the car­bon price. The ACCC’s focus is to ensure busi­ness­es do not make mis­lead­ing claims about price increas­es as a result of the car­bon price. The ACCC does not have a role in for­mal­ly mon­i­tor­ing, set­ting or restrict­ing price increas­es linked to the car­bon price and can­not pre­vent a busi­ness from putting up its prices as a result of the car­bon price. Since 1 July, there have been a num­ber of exam­ples where busi­ness­es have come under inves­ti­ga­tion for their pric­ing claims. For exam­ple, on 8 June 2012, the man­ag­ing direc­tor of Brum­by’s Bak­eries dis­trib­uted a newslet­ter to approx­i­mate­ly 250 Brum­by’s fran­chisees which con­tained the fol­low­ing state­ment:

”… We are doing an RRP 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 take the blame, after all your costs will be going up due to it.”

The ACCC con­sid­ered that Brum­by’s car­bon price state­ment may have had the effect of induc­ing or encour­ag­ing Brum­by’s fran­chisees to make rep­re­sen­ta­tions to retail cus­tomers link­ing prod­uct price increas­es to the car­bon price with­out rea­son­able basis. In response, the ACCC accept­ed a Court enforce­able under­tak­ing from Brum­bys on 16 July to ensure that any future state­ments in rela­tion to the effect of the car­bon price on Brum­bys’ pric­ing had a rea­son­able basis. Ear­li­er in July, the ACCC accept­ed an infor­mal under­tak­ing from Polaris Solar Pty Ltd and ACT Renew­able Ener­gy Pty Ltd for car­bon price claims regard­ing the impact of the car­bon price on house­hold elec­tric­i­ty prices that the ACCC con­sid­ered were like­ly to mislead.

To assist busi­ness, the ACCC released a guide to price claims and oth­er rep­re­sen­ta­tions in rela­tion to car­bon pric­ing. A copy is avail­able from the ACCC web­site.