Advising brewing company on pricing disclosures amid ACCC scrutiny

Australia currently imposes automatic, inflation-linked excise increases on alcohol twice a year, contributing to some of the highest beer prices globally. While the government maintains these taxes help mitigate alcohol-related harm, the hospitality industry, including local brewers, argue they inflate costs and deter on-premise consumption.

Piper Alderman has a long history with a major Australian brewing company, which is one of Australia’s oldest family owned and run breweries. We were engaged to advise and act in relation to the potential compliance risks associated with the Brewery increasing its prices of certain alcoholic beverages, and the necessary disclosures to wholesalers and retailers regarding the reasons for the price increases

Tom Griffith’s team provided advice on the risks associated with increasing prices. The issue was particularly sensitive and important given that, at the time, the ACCC had publicly announced that it would be closely scrutinising any price increases by brewers, in light of a freeze in government excise charges. This was off the back of the Treasurer writing to the ACCC chair Gina Cass-Gottleib, calling on the watchdog to monitor retailers (typically pubs) to ensure they didn’t use the excise mark-up to inflate prices.

Piper Alderman was called upon to address:

• Risks around making representations to wholesale customers about factors affecting prices
• The ACCC actively monitoring representations made about price increases and the powers it can exercise to obtain information, documents and evidence.
• Risks of “absolute claims” and the consequences of misleading representations about factors affecting prices
• The need to substantiate claims about pricing.
• The “do’s and don’ts” about making pricing increase representation.

The complexity of the matter related to the need for the client to protect its commercial position and profitability by making price increases. This had to be done while balancing the need to justify to its customer base/supply network the reasoning for those price increases.

As a result of our advice, the Brewery was better equipped to make pricing adjustments with an understanding of applicable competition and consumer law risks.