The Deputy Chair of the consumer watchdog has warned small businesses to make sure claims made about the impact of the carbon price are reasonable and has revealed it has already examined more than 100 businesses in relation to claims of carbon tax hikes.
The Australian Competition and Consumer Commission launch an updated carbon price claims guide for business in Hobart today.
ACCC Deputy Chair Dr Michael Schaper told SmartCompany the watchdog had revised its business guidance and said the issues concerning small businesses generally fall into the category of “ill-informed statements” about the impact of the carbon price on their costs and prices.
“In many cases, businesses are coming to this without fully knowing how carbon tax works and what they can and can’t say,” says Schaper.
“The key message is that businesses are always free to move prices as they see fit, but if they choose to move prices up and say it is due to carbon tax they need a reason to do that.”
Schaper says the ACCC has already looked at around 100 businesses in relation to potentially misleading and deceptive claims about the carbon tax.
“We have had cases where businesses have said, ‘We have put our prices up and it is all because of the carbon tax’, we have gone back to them and they have not been able to justify it,” says Schaper.
“If you want to move them up and you think it is due to carbon and other factors, the safest cause is to say it is because of a variety of factors, that is perfectly legitimate and legal.”
Schaper says complaints about carbon tax claims have been brought not just by customers but also by other small businesses, as well as some “high profile” cases which the ACCC picked up itself.
“From experience, it is not just customers that complain, it is also other small business competitors.”
He said the impact of the carbon tax was difficult to calculate so it may be “easiest” for businesses to wait until July 1 to adjust prices.
“It is a bit different to the GST; when the GST came in the ACCC was given discrete powers to look at the impact and that was much more of a mathematical exercise,” says Schaper.
“This is different as it is much harder to predict for individual firms what impact, if any, it has.”
“If you are going to be saying it is due to the carbon price, be able to back it up.”
Schaper also warned small businesses needed to be careful about talking to competitors about any price increases.
“As a small business you might ask your industry association about the carbon tax increase, that is perfectly legitimate, there is no problem looking at what your competitors are doing. But it has always been illegal for two or more businesses to sit around the table and discuss pricing – that is price fixing,” says Schaper.