Nov 032011
 

The government has announced that the ACCC, the Australian Competition and Consumer Commission, will be given responsibility to police how businesses pass on the carbon price and for ensuring they do not engage in price gouging by using the carbon price as an excuse to increase prices beyond its actual effect.

The best way to avoid such unwanted attention from the national regulator is to make an early start on preparing for the implementation of the carbon price.

For example, businesses should be asking the following questions:

  • Is my business going to absorb the impact of the carbon price or is it proposing to pass the cost on to customers?
  • Has my business prepared estimates of the likely impact of the carbon price on its prices?
  • How do these estimates compare to the estimates prepared by the government?
  • Does my company wish to advise customers that price increases are due to the effect of the carbon price or does it wish to remain silent on this point?
  • Will forward estimates of the likely impact of the carbon price on my prices stand up to ACCC scrutiny?
  • Have all frontline staff been briefed on what to say if asked about the impact of the carbon price on prices?

While the simplest ways of avoiding unwanted attention is either to absorb the effect of the carbon price or to make no mention of it in relation to price rises, these approaches do not make good business sense. Businesses have a right to pass on the impact of the carbon price in the form of higher prices and should do so.

The most sensible approach is to take the time now to calculate the likely effect of the carbon price on the price of your goods and services and then advise customers in clear and unambiguous terms what that effect is.

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