Assistant Treasurer and Minister for Competition Policy and Consumer Affairs
3 December 2007 - 8 June 2009
Interview with Garth Russell
ABC Radio Newcastle
Wednesday, 25 March 2009
SUBJECTS: Unit pricing
The Assistant Treasurer, Minister Chris Bowen joins us on the line to respond to this [unit pricing discussion]. Minister, is it the case that it’s just too hard to navigate this issue when it comes to quality?
Well look, on the issue of quality, this scheme has been welcomed across the board; by consumer groups, who have been calling for unit pricing for many years – they have welcomed the introduction of unit pricing. Now Mr Zumbo was out yesterday, quite confused in his criticism I must say, saying that we didn’t take into account quality.
It’s never been designed to take into account quality – no unit pricing regime in the world takes into account quality – and this one never intended to take into account quality. Quality, at the end of the day, is a matter for the consumer. It’s a matter for you and I and everybody else. Now you and I might like different things Garth, we might have a different view of quality; you might prefer one type of tomato sauce and I another, and that’s the way it should be. But what we should be able to do is to compare the prices, quickly and easily - that’s what unit pricing let’s us do - and we, as consumers, can decide the other issues of quality and convenience, based on that information.
What about how clear the difference is between certain types of products? There has been some concern that it hasn’t been stipulated how clearly that information will be on the products.
The code stipulates that – and just for your listeners coming to this for the first time – the unit price is per unit of measurement, so instead of just having the total price, you will also have it per the unit of measurement. So you will be able to compare goods that are in different size packages. The code requires that the unit price be clear, legible and prominent.
Now we haven’t gone down the road of saying ‘it should be a certain font size, or a font, or a certain colour’ because that really is government getting into how business works and that would increase compliance costs. But it does need to be clear and prominent and if it is not clear and prominent the ACCC will have the power to instruct that it be clear and prominent.
I’m not going to get in and say ‘it must be a certain amount of centimetres high’, that would be just ridiculous, and really, a government overreaching in policing these things.
Well there bee too much leniency for supermarkets to be not consistent in this?
No, every supermarket will be obliged to comply with the code – supermarkets over 1,000 square metres must comply with the unit pricing code – from the 1st December this year. The supermarkets less than 1,000 square metres in size that do choose to do unit pricing, must comply with the code. And the code will stipulate what units of measurement are to be used, for example, per 100 grams, per 10 grams, per litre, per metre, and so it will stipulate all of that. It will also stipulate what goods are exempt, for example, some supermarkets sell books, well you wouldn’t do the price per page that would be ridiculous. So some goods ill be exempt and the code will be mandatory and consistent across the country.
You mentioned that this was bring done elsewhere, is there a model, is there an example you can give of any other country where this has worked well?
Look, it has been in place for Europe, for some years. It has also been in place in several states in the United States, in some cases since the 1970s. And we have looked at all of those models – we have come up with our own model – but we have examined some of the models around the world as well.
There are studies from overseas which show that this can give the consumer considerable savings. And it makes sense. Imagine yourself at the supermarket, you’ve got a tin of something that is 525g and you’ve got another one, of a different brand, that is 675g. You are trying to work out which one provides you with the better value, you’ve got a couple of kids with you who are getting agitated, you are trying to do the sums in your head and it’s completely impossible.
You will know have all of that at your fingertips by looking at the price on the shelf, where you will have the total price and the price per 100 gram, for example, and you will be able to compare the two very easily.
Now this will be passed by the end of the year I believe?
Yes, the code will be up and running by the 1st July this year and it will be compulsory for supermarkets as at the 1st December.
So no correspondence will be entered into, is it as you want it right now?
Well, no, the draft code is out. There are some complexities – you mentioned toilet paper, there was a bit of debate yesterday over whether it should be per sheet or per roll – and there are some areas where there are complexities to be worked through, as to how we actually end up doing it. But it will be up and running by the 1st of December. I’ll be consulting on some of the final details in coming weeks.
Alright, I appreciate your time, thank you very much.
Not a problem Garth, cheers.