A five-year freeze on wholesale wholesale price caps will come into force for Australia’s retail sector, as a result of a raft of new federal legislation.
Key points:A freeze on all retail price caps is being proposed by the Howard GovernmentThe new laws will apply to wholesale and retail pricesThe price cap for wholesale will be capped at 20% of the wholesale priceThe new rules will apply for three years to July 1, 2020, but they will be extended for up to three years at a time from July 1 to July 31, 2021The Government is also extending the existing two-year cap on wholesale price to five yearsThe government has said the rules will “ensure that Australians can make informed choices about where to buy and sell products”.
The new restrictions on wholesale and wholesale price are part of the Government’s ongoing efforts to tackle the high price of imported goods.
Earlier this year, the Government announced that wholesale price cap would be abolished for wholesale and will apply only to wholesale prices.
The Australian Retailers Association (ARMA) has said it has no plans to stop selling wholesale goods to consumers.
It is not clear how many Australian businesses would see a rise in their prices.
“While there is a lot of uncertainty around the timing of the new rules, it is unlikely they will lead to a significant reduction in prices, given the extent to which the new restrictions will apply,” a spokesperson for the ARMA said.
The Government said it had decided to impose the cap after the introduction of its wholesale price regulation.
“In response to the growing number of consumer complaints, including those from our wholesale sector, the Howard government introduced its new wholesale price regulations in February 2017,” a Government spokesperson said.
“The measures are intended to reduce the impact of rising wholesale prices and to promote a level playing field between retail and wholesale customers.”
Wholesale customers will be able to choose their own prices for their products, and the price cap will not apply to them.
“In July, the Federal Government introduced a series of new laws that included the introduction the price of a litre of alcohol from a $1.80 bottle of beer to $1, and $2 for a litret of wine.
It also introduced a cap on the number of litres of alcohol a consumer could consume a year.
It has also introduced the national wholesale price index.