A whitepaper prepared by Principals Hans Weemaes and Dr. Luke Wainscoat, and Senior Associate Senthuran Rudran, explores the challenges posed by Australia’s new prohibition on excessive pricing by large grocery retailers.

The legislation, set to go into effect in July 2026, will prohibit large retailers with annual revenues exceeding $30 billion from engaging in excessive pricing when supplying or offering to supply grocery products to retail consumers. Excessive pricing is defined as “significantly excessive” when compared to the cost of supply, plus a reasonable margin.

Drawing on insights from cost accounting, the experts examine how to identify and estimate the cost of supply when assessing excessive pricing under the new prohibition. They also explore how differing interpretations may affect the identification and estimation of relevant costs. Core elements of this assessment include: the cost of supply, the reasonable margin, and whether the resulting price can be considered excessive.

The experts’ key findings include the following:

The cost of supply, the definition of a product, and the choice of timeframe over which costs are evaluated can produce substantively different cost estimates.
A key challenge introduced by the prohibition will be determining the appropriate measure of cost against which the margin should be assessed.
Supermarket retailers with flexible and integrated accounting and information systems will be better equipped to extract the costing information required under the legislation.

The full paper is available below.

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