Supermarket unit pricing reform: what the consultation signals for suppliers and retailers
In September 2025, Treasury opened and closed a consultation on strengthening the Retail Grocery Industry (Unit Pricing) Code of Conduct within a three-week window — a timeframe that left little room for considered industry response. The brevity of that process should not be read as an indication that the changes under consideration are minor. For businesses operating in food, grocery, and household goods, the proposals on the table represent a meaningful shift in compliance obligations and commercial operating conditions.
What the review addresses
Unit pricing — the display of cost per standard measure, such as dollars per 100 grams or per litre — has been a requirement for large supermarkets since 2009. The framework has operated with limited enforcement, modest penalties, and variable compliance. The current review, prompted in part by the ACCC's supermarket inquiry, signals an intention to tighten all three.
The specific concern driving the reform is shrinkflation — the practice of reducing pack size while maintaining or increasing the shelf price. Where this occurs without disclosure, unit pricing loses its utility as a comparison tool. The Government's position is that the existing framework has not adequately addressed this.
The proposals under consideration
The consultation paper canvassed several substantive changes. Supermarkets may be required to disclose explicitly when a product's pack size has been reduced without a corresponding price reduction. Unit price displays, both in-store and online, may be required to be larger and more prominent. The scope of the Code may be extended beyond major supermarkets to smaller retailers and online platforms. Standardisation of the units used — resolving inconsistencies such as cost per roll versus cost per sheet — was also under consideration. Civil penalties for non-compliance would represent a significant departure from the current framework.
The commercial implications
For businesses supplying into the grocery sector, the practical consequences of these changes are worth thinking through now rather than after the Government announces its response.
Packaging decisions that reduce volume without price adjustment may attract disclosure obligations at the retail level, with downstream reputational and commercial consequences for the supplier. The data infrastructure required to support real-time unit pricing — particularly across e-commerce platforms — represents a compliance cost that will fall unevenly across the sector. Smaller retailers brought within the scope of an expanded Code will face setup costs that larger operators have already absorbed.
The compliance burden is real. But businesses that build pricing transparency into their commercial model now, rather than in response to a regulatory requirement, are better positioned in a market where consumer trust in grocery pricing has been materially damaged.
What to do now
Treasury is reviewing submissions and a Government response is expected. The final shape of the reforms is not yet known, but the direction is clear. Businesses in the affected sectors should be reviewing their pricing and packaging practices, assessing the compliance cost implications of the proposals most likely to proceed, and considering how their systems — shelf labelling, e-commerce platforms, supplier agreements — would need to be updated.
If you would like to work through the potential compliance and financial impacts for your business, we are available to do so.
Corinne Kirk
Partner, Accountant
1300 102 542 | 0405 106 401
corinne@egu.au
This is general advice. It does not take account of your objectives, financial situation, or needs, and is not a substitute for advice that does. Before acting on anything in it, consider whether it suits your circumstances, and consider the relevant Product Disclosure Statement.