Australia allocates $30M to crack down on supermarket discount scams

The Australian Competition and Consumer Commission will receive an additional $30 million in funding as part of the Federal Government's efforts to crack down on "dodgy supermarket practices" following recent allegations of deceptive discounting tactics.

Prime Minister Anthony Albanese is set to announce the funding boost, aiming to strengthen the consumer watchdog's ability to investigate and combat misleading pricing schemes by major supermarket chains.

"Today we are announcing a crackdown on dodgy supermarket practices," Albanese stated. "We want to ensure that everyday Australians, families, and pensioners aren’t being taken advantage of by supermarkets, and we’re committed to making sure they get a fair go at the checkout."

The ACCC will use the funding to intensify its scrutiny of pricing strategies after uncovering hundreds of cases of alleged price manipulation at Coles (ASX:COL) and Woolworths (ASX:WOW).

The two retail giants are currently being sued by the watchdog for allegedly inflating the prices of certain products before applying discount labels through their respective 'Down, Down' and 'Prices Dropped' campaigns, creating the illusion of a bargain when prices were actually higher than before.

Treasurer Jim Chalmers will outline plans to reform local planning regulations to increase competition in the grocery sector.

Current restrictive planning laws are considered a major barrier, as they limit the availability of sites for new supermarkets or allow companies to "bank" land, preventing competitors from entering the market.

Chalmers will work with State and Territory governments to address the regulatory constraints, though the timeline and specifics of the proposed changes remain unclear.

Meanwhile, the Opposition has pushed for stronger measures, including divestiture powers that could force the breakup of large supermarket or hardware chains found guilty of repeated price-gouging.

Albanese has rejected these calls, arguing that forcing a supermarket to sell a store would likely result in the property being purchased by one of its rivals, doing little to enhance competition.

The funding boost to the ACCC follows last week's release of a draft mandatory food and grocery code by the Government, which includes potential multi-million-dollar fines for serious breaches of consumer protection laws.