Background: Coles and Woolworths are Australia's two biggest supermarket giants, together controlling more than two-thirds of the country's grocery market. Over the past few years, both have faced heavy scrutiny, from allegations of price gouging and staff underpayment to warehouse strikes and high-profile leadership controversies.

What happened: From July 1, Australia will become the first country in the world to introduce supermarket-specific anti-price-gouging laws. The new rules will prevent major supermarkets from charging prices deemed "significantly excessive" relative to supply costs plus a reasonable profit margin.  

What else: While the legislation doesn't explicitly name Coles or Woolworths, it only applies to supermarkets generating more than $30 billion in annual revenue. So, competitors like Aldi, Amazon, and Chemist Warehouse are exempt (for now). Still, some analysts believe enforcement will be difficult, so the real impact on both companies will likely be minimal.

What's the key learning?

💡 Excessive pricing sounds simple, but legally, it's one of the most contested concepts in competition law. The new law says prices can't be "significantly excessive'' compared to supply costs... plus a reasonable margin, but there's no fixed benchmark for what a "reasonable margin" actually is.      

💡 The Australian Competition and Consumer Commission would need to assess factors like shelf life, competitor pricing, seasonality and supply chain costs across 20,000-25,000 supermarket items to determine excessive pricing.

💡Excessive pricing cases around the world are rare. In Europe, excessive pricing laws typically require proof of market dominance abuse…which takes years of legal argument to establish. And the ACCC is focusing on monitoring rather than enforcing for the first 12 months, so the impact will be limited to start.